Volume Based Support & Resistance

The Volume Based Support & Resistance indicator identifies significant price levels by analyzing historical volume spikes to find high-conviction support and resistance zones across the entire visible chart. It utilizes a dynamic logic that categorizes levels into major and variable lines based on their proximity to previous price action and the intensity of trading activity.

Usage

The tool automatically plots horizontal lines on the chart where significant volume occurred. These lines serve as psychological barriers and liquidity zones:

• Major Lines: Solid lines representing primary structural levels. These are established when volume exceeds a specific threshold relative to a lookback period.
• Variable Lines: Dashed lines representing secondary levels that exist between major zones.
• Proximity Styling: Lines change color and style based on their distance from current price action. Levels close to the current price are solid and colored according to market bias (Bullish/Bearish), while distant levels become neutral and dashed to reduce chart clutter.

This tool is versatile and can be adapted for different timeframes by adjusting the percentage distance between lines. For example, a 10% distance is suitable for Daily charts (standard for assets like Bitcoin), while 5% may be more appropriate for lower timeframes like 1h or 15m.

Details

The script operates by tracking volume spikes using a highest(volume, length) calculation multiplied by a user-defined divider. When a volume condition is met, the script determines whether the current price represents a new major level or falls within a "variable" zone between existing lines. It uses Pine Script arrays to store, manage, and update these levels dynamically, ensuring that lines can be updated or extended as price interacts with them again.

Settings

Easy Settings

• Major Supp/Res Lines difference %: Sets the minimum percentage distance required between major support and resistance levels.

Pro Settings

• Variable S/R Distance From Main: Determines the relative distance from a major line where a secondary "variable" line can be formed.
• Variable S/R Distance From Eachother: Defines the minimum gap required between multiple variable lines.

Volume Settings

• Volume Highest Length: The lookback period used to find the highest volume peak.
• Volume Divider: A multiplier applied to the highest volume peak to set the threshold for identifying significant volume candles.

Labels (Debug)

• Show variable lines change point label: Displays a label when a variable line's price is updated.
• Show lines number label: Displays a summary label at the end of the chart showing the total count of major and variable levels.

FAQ

How do I access the Volume Based Support & Resistance indicator?

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

Why do some lines disappear or change to dashed?

The script uses a "Proximity" logic. To keep the chart clean, lines that are significantly far away from the current price are rendered as neutral dashed lines, while those near the current price remain solid.

Can I use this for intraday trading?

Yes. For intraday trading, it is recommended to lower the "Major Supp/Res Lines difference %" setting (e.g., to 1% or 2%) to capture more frequent price pivots relevant to shorter timeframes.