Fractal Support Resistance

The Fractal Support Resistance indicator identifies key market reversal levels using price fractals and volume confirmation to generate actionable trend signals. By tracking breakouts above or below these structural levels, the tool helps traders identify high-probability entry points aligned with a 50-period moving average filter.

Usage

The tool is primarily used to identify trend continuation or reversal signals based on price action relative to fractal levels. A "Long" signal is generated when the price closes above a resistance fractal for two consecutive bars while remaining above the 50-period EMA. Conversely, a "Short" signal occurs when the price closes below a support fractal for two consecutive bars while remaining below the EMA.

• Long Signals: Indicated by a green 'F' character at the top of the chart and a green bar highlight.
• Short Signals: Indicated by a red 'F' character at the top of the chart and a red bar highlight.
• Support/Resistance: The script plots cross markers on the chart representing historical fractal levels, allowing you to visualize key supply and demand zones.

To prevent overtrading and signal noise, the script includes a built-in 12-bar cooldown period between consecutive signals.

Details

The script calculates fractals using a 5-bar sequence where the middle bar (shifted by 3 bars) represents the highest or lowest point. Unlike standard fractals, this indicator adds a volume filter, requiring the volume at the fractal peak to be higher than a Simple Moving Average (SMA) of volume. This ensures the support or resistance level was formed with significant market participation.

The script also utilizes the request.security function, allowing users to calculate fractal levels from a higher timeframe while viewing them on a lower timeframe for better multi-timeframe analysis.

Settings

• Resolution: Determines the timeframe used for fractal calculations. If left blank, it defaults to the current chart timeframe.
• VolumeMA: Sets the length of the Simple Moving Average applied to volume to confirm fractal validity.

FAQ

How do I use the multi-timeframe feature?

By changing the "Resolution" setting, you can plot fractal levels from a higher timeframe (e.g., Daily) onto your current timeframe (e.g., 1-hour) to identify major structural levels.

What does the 'F' symbol represent?

The 'F' symbol indicates a Fractal breakout signal. It only appears after price has confirmed a breakout by closing beyond a fractal level for two consecutive bars.

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.