Bjorgum Key Levels

The Bjorgum Key Levels indicator identifies and visualizes critical price action milestones including breakouts, false breakouts (traps), and backchecks to help traders capitalize on significant market movements. By analyzing price structure and trend direction, the tool provides visual signals and alerts at pivotal points where supply and demand shift.

Usage

The Usage section describes how the script can be used to identify high-probability setups. The indicator focuses on three primary market behaviors:

• Breakouts: These occur when price breaches a key resistance or support level. The script identifies these points to capture trending runs where momentum is strong.
• False Breakouts (Traps): Also known as bull or bear traps, these signals appear when price moves beyond a level but fails to hold, leading to a swift reversal. This allows traders to capitalize on the liquidations of those positioned on the wrong side of the breakout.
• Backchecks: These represent pullbacks to previously broken levels that now act as the opposite polarity (e.g., old resistance becoming new support). These offer entries with defined risk parameters.

Users can toggle specific detection types such as "Detect Resistance Break" or "Detect False Breakdown" in the settings to tailor the visual output to their specific strategy.

Details

The indicator constructs support and resistance zones based on historical pivots. It standardizes these zones using the Average True Range (ATR) to ensure consistency across different assets and timeframes.

Key implementation details include:

• Pivot Calculation: Users can choose between Heikin Ashi, High/Low Body, or absolute High/Low sources to determine where levels are drawn.
• Zone Alignment: An "Align Zones" feature merges overlapping historical levels, creating intensified visual zones that represent long-standing areas of interest.
• Candlestick Integration: The tool incorporates a library of candlestick patterns (Dojis, Engulfing, Hammers, etc.) that are filtered to only appear when they interact with the identified key levels, increasing the confluence of the signals.

Settings

Zones

• Look Left / Look Right: Sets the number of bars to check for swing highs and lows to form a pivot.
• Number of Pivots: Determines how many historical levels are tracked simultaneously.
• ATR Length / Zone Width (ATR): Controls the standardization and vertical thickness of the support/resistance boxes.
• Max Zone Percent: Limits the zone size relative to price to prevent over-scaled boxes on volatile assets.
• Source For Pivots: Selects the price data used (HA, Body, or High/Low) for level generation.

Detection

• Detect Pivot Highs/Lows: Enables or disables the tracking of swing points.
• Detect Breakout/Breakdown: Displays arrows when price clears all active pivot levels.
• False Bull/Bear: Identifies traps where price breaks a level and immediately reverses within the "Lookback For Breaks" period.
• Moves Off Support/Resistance: Shows triangles when price action respects a zone without breaking it.

Candle Patterns & Filters

• Wait For Confirmed Bar: If enabled, signals only appear after the candle closes to prevent repainting.
• Pattern Selection: Checkboxes to enable detection for specific patterns like Engulfing, Tweezers, or Harami.
• Pattern Specific Filters: Fine-tune the criteria for candles, such as the "H&S Ratio" for Hammers or "Engulfing Must Engulf Wick."

FAQ

How do I interpret the different arrow sizes? Standard arrows typically represent normal breakouts or breaks of specific levels, while larger arrows are used to highlight false breakouts (traps), which often precede more volatile price reversals.

Why are some zones thicker than others? When the "Align Zones" setting is active, the script merges recurring levels that overlap. Thicker or more intense zones indicate areas where multiple historical pivots have converged, suggesting a more significant level of support or resistance.

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