Fractal Support Resistance

The Fractal Support Resistance indicator identifies key pivot points based on high/low price action and volume confirmation to help traders visualize dynamic support and resistance levels across various timeframes.

Usage

The Usage section focuses on identifying potential price reversals or breakout points using fractals. A bullish fractal (Support) is plotted when a low is preceded and followed by higher lows, while a bearish fractal (Resistance) occurs when a high is preceded and followed by lower highs. These points are specifically validated by volume being above its moving average to ensure the pivot point has sufficient market participation.

Traders can use these levels to:

• Identify potential entry and exit zones based on historical support and resistance.
• Place stop-loss orders just beyond the most recent fractal point.
• Detect trend shifts when price consistently breaks above a resistance fractal or below a support fractal.

Details

The script executes by evaluating a 5-bar sequence. For a fractal high (Resistance), the script checks if the middle bar (two bars back) is higher than the two bars preceding it and the two bars following it. For a fractal low (Support), it checks if the middle bar is lower than its neighbors.

A unique implementation detail in this script is the volume filter. A fractal is only plotted if the volume at the time of formation is greater than a Simple Moving Average (SMA) of volume. This helps filter out "weak" fractals that occur on low liquidity. The indicator also utilizes request.security, allowing users to anchor these levels to a specific resolution (timeframe) different from the current chart.

Settings

• Resolution: Determines the timeframe from which the fractals are calculated. Leaving it blank uses the current chart timeframe.
• Volume MA: Sets the length for the Simple Moving Average of volume used to validate the fractal points.

FAQ

How do I access the Fractal Support Resistance?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Why are the fractal marks offset?

Fractals require "future" bars (bars to the right of the pivot) to confirm the peak or trough. The crosses are plotted with an offset to accurately reflect the price point of the pivot bar.

Does this indicator repaint?

Because the script uses lookahead = barmerge.lookahead_on within the security function to fetch data from different timeframes, users should be aware of how historical data is processed versus real-time data. On the current timeframe, the fractal is only confirmed after the two following bars have closed.