A three-state directional breakout on a moving-average midline

What the three-state rule constructs

A breakout here is a chart condition that labels every bar against a moving-average midline. The moving-average is a 20-period simple average of the close. The rule-based-entry maps that comparison to one of three states and, if desired, paints the state on the chart so a later test can accept, reject, or skip the trade.

The three states are directional-up, directional-down, and non-directional. The procedure is complete when every bar receives one of those labels.

How each bar is labeled

A directional-up state is defined when both the bar low and the bar high are at or above the 20-period simple moving average of the close.

A directional-down state is defined when both the bar high and the bar low are at or below the same 20-period simple moving average of the close.

A non-directional state is defined when the bar low is at or below that moving-average and the bar high is at or above it. In that case the bar straddles the midline.

Two ways to show the same rule

A histogram-display plots the three states as separate colored histograms in a pane below price, with the 20-period simple moving average of the close drawn on the price pane. The sequence of states is then visible without coloring the price bars.

A colored-bar-display attaches the expert highlights to the price series that already carries the 20-period simple moving average. The same three-state rule is then read directly on the price bars.

One expert cannot draw both displays

The two display constructions cannot be used together from a single expert definition. If both styles are needed, a second expert must be created, one for each display style.