Tertiary Pivot Structural Zones

The Tertiary Pivot Structural Zones indicator identifies high-probability support and resistance areas based on Adam Grimes’ concept of hierarchical price pivots to filter market noise and highlight significant structural levels.

Usage

The Usage section describes how the script can be used to identify key market structures. This tool categorizes market turning points into three distinct orders to help traders differentiate between minor fluctuations and major trend shifts.

• First Order Pivots: Represent standard swing highs and lows. These are used as the foundation for higher-order calculations and appear as small circles on the chart.
• Second Order Pivots: Formed when a First Order Pivot is surrounded by two lower First Order Highs (for a peak) or two higher First Order Lows (for a trough). These represent intermediate structural shifts and are marked with neutral triangles.
• Tertiary (Third Order) Pivots: These are the most significant levels, formed when a Second Order Pivot is confirmed by surrounding Second Order points. These are marked with colored circles (Red for resistance, Green for support).
• Structural Zones: When a Tertiary Pivot is detected, the indicator draws a horizontal zone (box). These zones remain active until price closes beyond them.
• Mitigation and Breakouts: Traders can monitor these zones for reversals (mitigation) or trend continuations (breakouts). A dashed line remains on the chart to show where a zone was previously violated.

Details

The script utilizes a recursive logic to filter price action. By requiring multiple layers of confirmation (a pivot of pivots), it identifies "Tertiary" points which historically represent significant supply and demand exhaustion areas.

To create actionable zones rather than just single price points, the script applies a buffer based on 40% of the 14-period Average True Range (ATR). This ensures that the structural zones account for current market volatility. The script manages these zones dynamically, extending them across the chart until a candle close breaks the level, at which point the zone is "broken" and removed from active tracking.

Settings

• Pivot Left Hand Strength: Determines the number of bars required to the left of a high or low to qualify as a First Order Pivot.
• Pivot Right Hand Strength: Determines the number of bars required to the right of a high or low to confirm a First Order Pivot.
• Show Minor (1st Order) Points?: Toggles the visibility of the smallest swing points (circles).
• Show Intermediate (2nd Order) Points?: Toggles the visibility of the intermediate structural triangles.

FAQ

How do I interpret the different colors on the chart? Red circles and boxes represent Tertiary Resistance (Supply), while Green circles and boxes represent Tertiary Support (Demand). Neutral blue/grey triangles indicate intermediate Second Order structure.

What happens when a zone is broken? When price closes above a resistance zone or below a support zone, the box is deleted and replaced with a dashed line at the level of the breakout to signify a structural shift.

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