Volume-based Support & Resistance Zones V1

The Volume-based Support & Resistance Zones V1 indicator identifies high-volume fractal pivots to plot significant price levels based on candle wicks and volume thresholds. It provides a visual framework for recognizing where institutional activity is likely to cause trend continuations or reversals.

Usage

This tool can be used to identify key intraday and swing trading levels by looking for "Confirmation Zones." When price reaches a zone, traders can look for rejection or breakout patterns.

• Trend Reversals: Watch for price to enter a support or resistance zone and fail to break through, indicating a potential reversal.
• Break and Retest: If a zone is broken with high volume, traders often wait for a retest of that level (where previous resistance becomes support) to confirm a trend continuation.
• Zone Significance: The vertical width of a zone is determined by the size of the candle wick at the fractal point; larger zones often represent more significant areas of historical volatility and interest.

Details

The script operates by scanning for fractal highs and lows (confirmed by a specific sequence of higher highs/lower highs) that coincide with a volume spike above a user-defined Moving Average.

• Multi-Timeframe Engine: The indicator supports up to four different timeframes simultaneously. It is designed to filter out lower timeframe noise when viewing higher timeframe charts.
• Box and Line Management: Using Pine Script arrays, the tool efficiently manages drawing objects to limit memory consumption while allowing for a high number of historical zones to be displayed.
• Dynamic Scaling: For higher timeframe zones, the script ensures levels begin exactly at the fractal point, utilizing maximum historical bar data to maintain accuracy.

Settings

General Settings

• Extend all S/R Zones to Next Zone: Connects historical zones to the subsequent zone for continuous horizontal levels.
• Extend active S/R Zones to Right: Extends currently active levels to the far right of the chart.
• Show Time Frame Label: Toggles labels indicating which timeframe produced the zone.
• Line Style/Width (H/L and O/C): Customizes the appearance of the High/Low lines and Open/Close lines within the zones.

Time Frame (1-4) Settings

• Display Mode: Choose between displaying full zones, lines only, or disabling the specific timeframe.
• Time Frame: Select the specific interval for calculation (Chart, 5m, 1h, D, etc.).
• Volume MA - Threshold: Sets the sensitivity for the volume filter; higher values require more relative volume to trigger a zone.
• Number of Zones Back: Controls the lookback period and the number of historical zones retained on the chart.
• Colors: Individual color and transparency pickers for support and resistance lines and fills.
• Alerts: Select from various alert conditions including price entry, breakouts, or new zone formation.

FAQ

How do I use this for multiple timeframes? You can configure up to four different timeframes in the settings menu. Higher timeframe zones will automatically be prioritized and formatted according to your color choices.

Can I set alerts for specific price levels? Yes, the indicator features built-in alert logic. You can set alerts for price entering a zone, breaking out of a zone, or when a new zone is identified.

How to access Volume-based Support & Resistance Zones V1? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.