Resistance/Support Indicator

The Resistance/Support Indicator tool identifies key price levels by analyzing pivot locations to establish areas of significant market horizontal interest. By weighting these levels based on historical price interaction, it provides a dynamic view of supply and demand zones directly on the chart.

Usage

The indicator can be used to identify potential breakout or reversal zones. When price approaches a highlighted resistance or support line, traders can monitor for price action confirmation. The strength of these levels is determined by their "weight," which increases as more pivots cluster around a specific price range.

• Trend Confirmation: Use the levels to set price targets or stop-loss zones.
• Weight Interpretation: Higher weight levels represent historical significance where price has frequently stalled or reversed.
• Breakouts: Monitoring crossovers of the primary resistance level can signal potential shifts in market structure.

Details

The script utilizes a custom deviation-based pivot detection algorithm to locate price turning points. Once a pivot is identified, the script checks if it falls within a specified percentage range of an existing support or resistance level. If it does, that level's weight is increased and its position is updated. The tool manages an internal history of these levels, allowing it to track and display the most significant zones over a long period.

Settings

Pivot

• Deviation: A multiplier affecting how much price must deviate from a previous pivot to register a new one.
• Depth: The minimum number of bars required for pivot analysis.

Resistance/Support

• Nb Max res/sup: The maximum number of support/resistance levels kept in the historical array. Increasing this allows the indicator to consider older data.
• Nb show res/sup: Controls how many significant levels are drawn on the chart.
• Min weight shown: The minimum weight required for a level to be displayed, filtering out minor price fluctuations.
• % range stack: The percentage price change allowed to group a new pivot into an existing support or resistance level.

Drawings

• Show table with stats: Toggles a summary table showing the price and weight of the primary level.

FAQ

How do I interpret the "weight" of a level?

The weight represents the frequency of price pivots occurring near that specific price level; higher weights indicate a historically stronger zone.

Can I change how sensitive the pivot detection is?

Yes, by adjusting the "Deviation" and "Depth" settings in the Pivot group, you can make the indicator more or less sensitive to minor price movements.

How do I access Resistance/Support Indicator?

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