BIN Based Support and Resistance

The BIN Based Support and Resistance indicator provides an alternative method for identifying key price levels by grouping market data into "bins" to find areas of central tendency. This approach helps traders identify zones of consolidation and significant support or resistance based on price action distribution rather than simple local peaks and valleys.

Usage

The tool divides price action into 10 separate bins over a specified lookback period. It then calculates the average value within each bin to plot dynamic support and resistance lines.

• Identifying Consolidation: When two or more lines appear close together, it indicates a high volume of price action in that range, similar to a Volume Profile’s Point of Control (POC). These areas often act as significant zones where price may accumulate before a breakout.
• Backtest Statistics: The indicator tracks how many times price was rejected at these levels. Users can view the percentage success rate of each line acting as support or resistance to gauge the reliability of a zone.
• Breakout Monitoring: Because these lines are based on averages, users should wait for confirmed support or resistance (e.g., multiple closes above/below a level) before making a trade decision.

Details

Unlike traditional pivot-based indicators that only look at extreme highs and lows, this script uses "Binning" to analyze all price action within a period. By calculating the average recurring value within different price intervals, the indicator highlights where the market has spent the most time. This allows the levels to adjust dynamically to trading ranges, providing a more holistic view of market structure.

Settings

• Lookback Length: Determines the number of previous bars used to calculate the max/min range and the bins. A common setting is 250 to 500 bars.
• Where would you like the statistics to display?: Offers options to show backtest results "On SR lines", in a "Table" on the side of the chart, or to turn them "OFF" for a cleaner view.
• Offset the lines ahead: Adjusts how far into the future the support and resistance lines are projected.

FAQ

How do I use the backtest percentages?

The percentages indicate how often a specific line successfully rejected price. A high support success percentage suggests the level has historically been a strong floor.

Why do some lines appear so close together?

Lines clustering in a narrow range indicate a high-density price area where the market has frequently consolidated, signifying a major area of interest.

How can I access BIN Based Support and Resistance?

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