Extrapolated Pivot Connector - Lets Make Support And Resistances

The Extrapolated Pivot Connector indicator identifies and projects linear support and resistance levels by connecting historical pivot points and extending them into the future to forecast potential price reversal zones.

Usage

The Usage section describes how the script can be used to define trend channels and key price levels. Users can identify significant market structures by connecting two specific high points (resistances) or two specific low points (supports).

The tool is particularly effective for:

• Trend Identification: Visualizing linear channels in which price is currently moving.
• Breakout Detection: Monitoring when price breaks above the extrapolated resistance or below the extrapolated support line.
• Applying to Oscillators: Beyond price action, the tool can be applied to secondary indicators like the RSI or Momentum oscillator. To do this, use the "Add indicator on..." feature in your charting platform, then enable the "Use Custom Source" setting within the script to align the pivots with the oscillator’s data.

Details

The script functions by detecting pivot highs and lows based on a user-defined lookback period. Once these points are established, it selects two specific pivots (Point A and Point B) and calculates a linear trajectory between them. This line is then extrapolated to the right of the current bar.

When price growth appears non-linear or exponential, switching the price scale to Logarithmic (Alt + L) can help maintain the accuracy of the linear projections. For oscillators, it is recommended to use settings that provide relatively constant peak magnitudes to ensure the pivot connections remain relevant to the current market volatility.

Settings

General Settings

• Length: Determines the sensitivity of pivot detection. Smaller values capture minor price fluctuations (noise), while larger values focus on significant long-term structural peaks and valleys.
• A-High Position: Specifies which historical pivot high to use as the first point (Point A) for the resistance line.
• B-High Position: Specifies which recent pivot high to use as the second point (Point B) for the resistance line.
• A-Low Position: Specifies which historical pivot low to use as the first point (Point A) for the support line.
• B-Low Position: Specifies which recent pivot low to use as the second point (Point B) for the support line.
• Use Custom Source?: When enabled, allows the script to calculate pivots based on a specific indicator or data stream rather than standard High/Low prices.
• Custom Source: Defines the specific input data (e.g., Close, RSI, Moving Average) used when "Use Custom Source" is active.

FAQ

How do I use this on an RSI or MACD?

You can apply the tool to other indicators by using the "Add indicator on..." function in your platform. Once added, ensure you check the "Use Custom Source" box in the settings so the lines calculate based on the oscillator values instead of price.

Why do the lines disappear or change suddenly?

The lines update dynamically as new pivot points are confirmed. Since a pivot requires a specific number of bars to its right to be confirmed (defined by the Length setting), the connections will adjust once a newer, more relevant peak or valley is established.

How can I get access to this tool?

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