Support and Resistance Zone

The Support and Resistance Zone indicator automatically identifies and visualizes key psychological market levels by plotting dynamic zones based on pivot points and market volatility. By using the Average True Range (ATR) to define zone width, it provides a more realistic representation of supply and demand areas than fixed price lines.

Usage

The indicator can be used to identify potential reversal points or breakout zones. When price enters a support (green) or resistance (red) area, traders often look for confirmation signals to enter a trade. The tool distinguishes between validated zones and anticipated zones, allowing for both conservative and aggressive strategy implementations.

• Validated Zones: These are confirmed after the "Pivot Legs" criteria are met on both sides of the pivot candle.
• Anticipated Zones: These appear earlier using a shorter right-leg lookback, providing a faster but less certain indication of potential turning points.
• Extensions: Users can extend the most recent zones to the current bar for better visual alignment with live price action.

Details

The script identifies pivot highs and lows based on user-defined "Pivot Legs." A zone is created around these pivots using the ATR of the pivot candle to determine the zone's height (Pivot ± ATR/2). To prevent clutter, the script includes logic to ignore new pivots if they fall within an existing active zone, ensuring only significant structural shifts create new levels.

Settings

Supports and Resistances Settings

• Pivot Legs: The number of candles required to the left and right of a high/low for it to be considered a pivot point.
• Extend Last Supports: Specifies how many of the most recent support zones should be extended to the rightmost bar.
• Extend Last Resistances: Specifies how many of the most recent resistance zones should be extended to the rightmost bar.

Anticipation

• Show Support/Resistance Anticipated: Toggles the visibility of early-detection zones.
• Right Pivot Legs for Anticipation: Sets a smaller lookback for the right side of the pivot to identify potential zones faster.

Style

• Support/Resistance Colors: Customize the line and area colors for both support and resistance zones.

FAQ

How do I access Support and Resistance Zone?

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

Why do some zones disappear?

Anticipated zones are temporary and will disappear if the high/low of the pivot is breached before the "Right Pivot Legs" count is fully satisfied.

How is the width of the zone calculated?

The width is derived from the Average True Range (ATR) at the time the pivot was formed, meaning more volatile market conditions will result in wider support and resistance zones.