Support and Resistance

The Support and Resistance indicator identifies and displays key price levels by combining volume-based analysis with pivot point calculations to provide a comprehensive view of market structure.

Usage

The indicator can be used to identify significant historical price zones where reversals or consolidations are likely to occur. Traders can use these levels for entry and exit points, or to gauge the strength of a potential breakout.

• Market View: Users can toggle between Short term, Standard, and Long term views. This adjusts the lookback sensitivity, making the tool adaptable for scalping, day trading, or swing trading.
• Dynamic Importance: The thickness of the lines indicates the "importance" of a level, calculated based on the frequency of price touches and the volume traded at that level.
• Color Logic: Lines automatically change color based on the current price position. Levels above the current price act as resistance (red by default), while levels below act as support (green by default).
• Overlapping Levels: When multiple calculation methods identify the same price area, the line thickness increases, highlighting a "confluence" zone of higher significance.

Details

The script utilizes a custom rolling Point of Control (POC) function. Unlike standard pivot points that rely solely on price peaks and valleys, this tool identifies levels where the highest volume concentration has occurred over a specific lookback period.

The importance score is derived from:

• Touch Count: A count of how many times price has interacted with the specific level since its inception.
• Volume Accumulation: The total volume traded within a small percentage range of the identified level.

Settings

• Market View: Selects the lookback period for calculations (Short term, Standard, Long term).
• Show touch | volume count: Enables labels on the last bar showing the specific data points for each level.
• Number of Lines to Show: Controls the quantity of support/resistance levels displayed on the chart (1-8).
• Support Color: Sets the color for levels currently acting as support.
• Resistance Color: Sets the color for levels currently acting as resistance.

FAQ

How do I access the Support and Resistance indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

What determines the thickness of the lines? The thickness is determined by an importance score, which increases based on the number of times price has touched the level and the amount of volume traded at that price.

Can I use this on any timeframe? Yes, the "Market View" setting allows you to scale the lookback period to suit any timeframe from 1-minute to monthly charts.