Best Support And Resistance Indicator V1

The Best Support And Resistance Indicator V1 indicator automatically identifies and plots institutional-grade support and resistance zones on the chart by analyzing price touches and swing structure.

Usage

The Usage section describes how the script can be used to identify key market levels and potential reversal points. This indicator replaces manual zone drawing by detecting where price has historically reacted multiple times.

• Support Zones: Plotted when the price touches a specific area two or more times and bounces in a bullish direction. Traders use these zones to look for long entries or to set profit targets for short positions.
• Resistance Zones: Plotted when the price touches an area two or more times and bounces in a bearish direction. These are typically used to identify shorting opportunities or to set profit targets for long positions.
• Breakout Identification: When the price closes outside of a plotted zone, it is considered "broken." The script can visually gray out these zones, signaling a potential trend continuation in the direction of the breakout.
• Rejection Signals: If enabled, the indicator provides candlestick pattern labels (like Morning Star or Evening Star) when they occur within the identified zones, offering additional confluence for entries.

Details

The indicator utilizes a pivot-based algorithm to locate price swings. It ensures that zones are only drawn based on clear market waves rather than choppy, sideways price action.

• Swing Logic: The tool uses a lookback period to find pivot highs and lows. A valid touch is defined by price returning to the same level within a certain proximity without breaking through it significantly.
• Zone Calculation: Resistance zones are formed using the highest high of the pivots and the highest "upper body" (open/close) of those candles. Support zones use the lowest low and the lowest "lower body" (open/close).
• Zone Aging: The script manages computational resources and chart clarity by expiring zones after a user-defined number of bars or when price decisively breaks through them.
• Pattern Integration: The script includes logic for Evening Star, Morning Star, Inside Bars, Tweezer Tops, and Tweezer Bottoms to highlight high-probability rejection points within the S&R zones.

Settings

• Swing Lookback (Bars): Sets the number of bars used to identify a pivot high or low. Higher values filter out minor fluctuations and focus on major market swings.
• Pivot Tests for Valid Zone: Determines how many times price must touch an area (2, 3, or 4) before a zone is officially drawn.
• Zone Expiry: The number of candles after which a zone is removed from the chart. Set to 0 to keep zones indefinitely until broken.
• Resistance/Support Color: Customizes the visual color of the bullish and bearish zones.
• Show Broken Zones: When enabled, zones that have been breached by price remain on the chart but are colored gray.
• Show Candle Pattern Labels: Toggles the visibility of technical candlestick patterns that occur inside active zones.
• Proximity %: Defines the buffer area around a zone used for calculating retests and alerts.
• Show Zone Retest Labels: Displays a label when price returns to a previously established zone after moving away.

FAQ

How do I adjust the sensitivity of the zones? You can adjust the "Swing Lookback" to focus on larger or smaller price movements and change the "Pivot Tests" to require more touches for a zone to be considered valid.

What happens when a zone is broken? By default, the indicator will change the zone color to gray to indicate the level has been breached, though this behavior can be toggled in the settings.

How can I access the Best Support And Resistance Indicator V1? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.