Godfather of Support & Resistance

The Godfather of Support & Resistance indicator automates the identification and plotting of key price levels to help traders visualize potential market reversal or consolidation zones.

Usage

The script is designed to highlight historical price levels where the market has shown a tendency to react. Once added to the chart, it will automatically plot horizontal lines representing support (green) and resistance (red).

• Identifying Trade Entries: Traders can use Support levels as potential buy zones and Resistance levels as potential sell zones.
• Filtering Significance: By adjusting the "Minimum Touches" setting, you can filter out minor price fluctuations and focus on levels that have been tested multiple times, increasing their statistical significance.
• Volatility Adaptation: The "Tolerance" setting allows the indicator to group price levels that are close to each other. This is particularly useful for assets with high volatility where exact price touches are rare.
• Breakout Alerts: The indicator includes built-in logic to alert users when the price closes above a resistance level or below a support level.

Details

The script utilizes a pivot-point-based detection system to find local highs and lows. It then employs a dynamic grouping algorithm:

1. Pivot Detection: It identifies pivot highs (resistance) and lows (support) based on a user-defined lookback/lookforward period.
2. Grouping Logic: New pivots are compared against existing levels. If a new pivot falls within a specific percentage (tolerance) of an existing level, it is considered a "touch" of that existing level rather than a new unique line.
3. Visualization: To maintain chart clarity, the script limits the total number of lines displayed and provides labels indicating the exact price and the total number of times that level has been respected.

Settings

Main Settings

• Minimum Touches to Show Level: The number of times price must interact with a zone before it is displayed on the chart.
• Max Lines to Keep: Limits the number of support and resistance lines shown to prevent chart clutter.
• Pivot Length for S&R: Sets the sensitivity for detecting local peaks and troughs. Higher values identify major long-term levels, while lower values identify shorter-term intraday levels.
• Tolerance for Touch Detection (%): A percentage-based threshold used to group nearby price points into a single level.

FAQ

How do I access Godfather of Support & Resistance?

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

What is the difference between a Support and Resistance level?

Support levels (green) represent areas where buying interest is strong enough to overcome selling pressure, potentially causing a price bounce. Resistance levels (red) are areas where selling interest overcomes buying pressure, potentially causing a price reversal downward.

Can I use this for intraday trading?

Yes, by lowering the "Pivot Length" and "Minimum Touches" settings, the indicator can be adapted to find shorter-term levels suitable for scalping or day trading.