Support and Resistance V2

The Support and Resistance V2 indicator identifies dynamic price levels and breakout opportunities by analyzing short-term and long-term price action windows. It provides visual cues for potential trend reversals and breakout signals to help traders navigate market volatility.

Usage

The tool can be used to identify key support and resistance levels across different timeframes. When price action breaks above a short-term resistance level, a buy signal (green label) is generated, indicating a potential bullish breakout. Conversely, when price drops below a short-term support level, a sell signal (cross icon) appears, suggesting a bearish breakdown.

The indicator also includes two Simple Moving Averages (SMA) to help identify the broader trend direction. Traders can look for breakouts that align with the slope or crossover of these averages for higher-probability setups.

Details

The script calculates support and resistance based on recent highs and lows within two user-defined lookback windows. Window 1 focuses on immediate short-term peaks and troughs, while Window 2 tracks longer-term structural points.

A unique "Trade Zone" logic is incorporated using a percentage of the current range, which can help in filtering minor price fluctuations. The script is also capable of using an alternative source (such as the closing price) instead of standard highs and lows for level calculation, offering a smoother interpretation of market structure.

Settings

• Use alternative source?: When enabled, the script uses the alternative source instead of High/Low for calculations.
• Alternative source: Defines the data source used if the above setting is enabled (default is close).
• Lookback Window 1: The number of bars used to determine short-term support and resistance levels.
• Lookback Window 2: The number of bars used to determine long-term support and resistance levels.
• Percent of the range to use for trade zone: Determines the buffer zone around levels to filter out noise.
• Shortest SMA: Sets the length for the fast-moving average.
• Shortest Source SMA: Data source for the fast SMA calculation.
• Long SMA: Sets the length for the slow-moving average.
• Long SMA Source: Data source for the slow SMA calculation.

FAQ

How do I interpret the breakout signals?

A buy signal occurs when the price closes above the previous short-term resistance, while a sell signal occurs when the price closes below the previous short-term support.

Can I use this for different timeframes?

Yes, the indicator is designed to be versatile; however, you may need to adjust the Lookback Windows in the settings to better fit the volatility of your chosen timeframe.

How can I access Support and Resistance V2?

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