Breakout And Retest Indicator: Four Tolerance Bands

Written by Dominic Walsh · Published 2 Jun 2026 · Last updated 26 Aug 2026

The breakout and retest indicator judges a return by how far it goes. tol comes from ATR, and the code then applies it four ways. Price must come back to the pivot, must not overshoot by five tolerances, and must not close two tolerances beyond it. Everything scales with volatility.

This build ships as a compiled .ex4 for MT4 and .ex5 for MT5; the screenshots below come from GBPUSD M15.

Platforms	MT4 (.ex4) + MT5 (.ex5)
Chart window	Main price chart
Plots	4: Pivot High, Pivot Low, Retest Buy, Retest Sell
Alerts	popup, push notification, email, sound
Inputs	14

What the Breakout And Retest Indicator draws on the chart

Pivot High is the salmon line carrying the most recent confirmed high.

Pivot Low is the medium spring green line for the low side.

Retest Buy and Retest Sell mark the bar where a return held.

OBJ_HLINE and OBJ_VLINE objects mark the pivot price and the retest bar.

• Pivot High: line, salmon, width 1
• Pivot Low: line, medium spring green, width 1
• Retest Buy: arrow, lime, width 3, arrow code 233
• Retest Sell: arrow, red, width 3, arrow code 234

How the Breakout And Retest Indicator calculates its values

Finding and holding a pivot

A pivot needs `FractalDepth` `2` bars on each side that fail to beat it. The two pivot buffers then carry the most recent value forward, so each line runs flat until a fresh pivot replaces it.

Confirming the break

The code searches up to `BreakoutMaxBars` `10` bars after the pivot for a close beyond it. No break inside that window means the pivot expires quietly. `RetestMaxBars` `20` then bounds how long the retest may take.

Four ways to fail

tol takes ATR at `AtrPeriod` `14` times `AtrRetestMult` `0.30`. The code skips a return that never comes within one tolerance. It skips one that overshoots by five tolerances. A close two tolerances back through the level fails as well.

How to read the signals

The two coloured lines are pending levels, not signals.

A mark means the return came close enough and held on a closing basis.

Wider ATR means every tolerance band widens with it.

Most pivots produce nothing, which is the design working.

Alert channels in this build: popup, push notification, email and sound, one message per closed bar.

`EnableAlerts` starts on and `EnablePopup` carries the text. `EnablePushNotify`, `EnableEmail` and `EnableSound` begin false. `SoundFile` picks the clip. Every stage reads closed bars, and the guard allows one retest message per bar.

Every Breakout And Retest Indicator input

Core settings

Setting	What it does	Default
FractalDepth	Bars each side of pivot (fractal depth). Bars each side of a pivot, default `2`.	2
AtrPeriod	ATR period for retest tolerance. ATR length behind every tolerance, default `14`.	14
AtrRetestMult	Retest tolerance = ATR * mult. Retest tolerance in ATR units, default `0.30`.	0.30

Display settings

Setting	What it does	Default
BreakoutMaxBars	Max bars after pivot to confirm breakout. Bars after the pivot in which a break must happen, default `10`.	10
RetestMaxBars	Max bars after breakout to retest pivot. Bars after the break in which a retest must happen, default `20`.	20
DrawLevels	Draw HLINE at pivot + VLINE at retest. Draws the pivot line and the retest marker, default `true`.	on
LevelHistory	Max stored levels (older ones removed). How many stored levels the tool keeps, default `50`.	50
ArrowGapAtrMult	Arrow offset from bar = ATR * mult. Mark distance from the bar in ATR units, default `0.50`.	0.50

Alert settings

Setting	What it does	Default
EnableAlerts	Master switch for the retest entry alerts, default `true`.	on
EnablePopup	Terminal dialog on a retest entry, default `true`.	on
EnablePushNotify	Phone push on a retest entry, default `false`.	off
EnableEmail	Mail delivery on a retest entry, default `false`.	off
EnableSound	Sound playback on a retest entry, default `false`.	off
SoundFile	Wav clip for the retest alert, default `alert.wav`.	alert.wav

Settings that fit your chart

GBPUSD M15 is the reference chart, and it produces clean channel breaks around the London hours. `BreakoutMaxBars` at `10` gives a pivot two and a half hours there. On M5 that window is under an hour. On H1 a full setup can take a day to complete.

When the Breakout And Retest Indicator fails

A two-bar fractal is shallow, so many pivots are not levels anyone was watching.

Four tolerance tests reject plenty of returns that looked fine by eye.

ATR moves between sessions, so the same setup can pass in the morning and fail at night.

Copy the compiled Breakout And Retest Indicator file into your MQL4/Indicators folder, and the MT5 build into MQL5/Indicators, then restart the terminal and drag it onto a chart. The step-by-step guide with screenshots is at how to install MT4 and MT5 indicators.

Related on forexmt4systems.com: break plan.

Background reading on the method behind the Breakout And Retest Indicator: VIX on Wikipedia, Uptrend at Investopedia.

Download the Breakout And Retest Indicator for MT4 and MT5

The zip holds the compiled Breakout And Retest Indicator build for MT4 and MT5, plus a short README. Compiled files only, no source. Enter your email below and the download link arrives in your inbox.

FAQ

What does AtrRetestMult at 0.30 set?

The base tolerance. It takes ATR at `AtrPeriod` `14` and multiplies by 0.30, so on a chart where ATR reads 10 pips the band is 3 pips. Every other test in the retest logic is a multiple of that number.

Why does AtrRetestMult reject an overshoot?

Because a deep push through the level is not a retest, it is a failure. The code skips a return that goes five tolerances past the pivot, and skips a close two tolerances beyond it. Both mean the break did not hold.

How long do BreakoutMaxBars and RetestMaxBars allow?

`BreakoutMaxBars` `10` bars for the break plus `RetestMaxBars` `20` bars for the return, so thirty bars at most. On GBPUSD M15 that is about seven and a half hours. After that the pivot expires with no mark.

What do the Pivot High and Pivot Low lines mean?

The most recent confirmed pivot price on each side, which the code carries flat until a newer one replaces it. They are pending levels rather than signals. Watching where price sits against them tells you which setup could be forming.

Are results guaranteed?

No. Trading involves risk. Results are not guaranteed; past performance is not indicative of future results. Use the Breakout And Retest Indicator as one input. Always backtest before trading live.