Support and Resistance Strategy

The Support and Resistance Strategy indicator provides an automated approach to trend identification and exit management based on classic pivot point calculations. It aims to identify potential entry points relative to a central pivot while defining logical liquidation zones using support and resistance levels derived from previous price action.

Usage

The Support and Resistance Strategy can be used to identify trend direction and potential reversal points across various asset classes, including Forex and Crypto. The tool plots specific visual markers on the chart to indicate trade phases:

• Entry Points: Green circles indicate a long entry signal when the current price crosses above the pivot level (C). Red circles indicate a short entry signal when the price drops below the pivot level.
• Exit Points: Green crosses signal the liquidation of a long position when price reaches or exceeds the calculated resistance (R). Red crosses signal the liquidation of a short position when price reaches or drops below the calculated support (S).

This strategy is particularly effective in markets showing clear cyclicality or mean-reverting tendencies around key daily levels.

Details

The script utilizes a standard pivot point calculation based on the previous bar's High, Low, and Close (HLC3). The core logic is defined by three mathematical components:

• Center (C): Calculated as (Previous High + Previous Low + Previous Close) / 3. This serves as the primary trend filter.
• Resistance (R): Calculated as (2 × C) - Previous Low. This level acts as the target for long positions.
• Support (S): Calculated as (2 × C) - Previous High. This level acts as the target for short positions.

By using the previous period's data to project current levels, the indicator provides a static framework for the current candle, allowing traders to react to price breaks and reaches in real-time.

Settings

• Buy/Sell Markers: These visual plots are triggered based on the price relationship with the calculated pivot.
• Stop Markers: These plots (crosses) are triggered when price interacts with the calculated support or resistance boundaries.

FAQ

How do I use the Support and Resistance Strategy?

The indicator is best used on intraday or daily charts where pivot levels act as significant psychological barriers. Users look for price to hold above the center for longs and below for shorts.

What assets does this work best with?

While applicable to any market, it is commonly used in FX, Equities, and Futures where daily pivot levels are widely watched by institutional participants.

How can I access the Support and Resistance Strategy?

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