Support and Resistance Retest Breakout Signals

The Support and Resistance Retest Breakout Signals tool identifies high-probability supply and demand zones by requiring pairs of swing highs or lows to align within a volatility-adjusted tolerance. This approach filters out isolated noise and confirms significant market structure levels while tracking volume participation and post-breakout retest behaviors.

Usage

The script is designed to highlight areas of historical price reaction and provide actionable signals based on how price interacts with these zones.

• Zone Identification: Observe newly formed support (green) and resistance (red) zones. These are only created when two swing points match, indicating a confirmed level of interest.
• Volume Analysis: Each zone contains buy/sell balance bars. A larger green bar suggests dominant buying pressure during the zone's formation, while a larger red bar indicates selling dominance.
• Retest Signals: Look for bullish labels when price breaks above resistance, closes outside it, and returns to "retest" the zone from above. Conversely, bearish signals appear when price breaks below support and returns to test it from below.
• Time Horizon Adjustments: Use a higher Time Horizon for long-term macro levels and a lower value for scalping or day trading frequent intraday structures.

Details

This tool utilizes a volatility-adjusted matching algorithm to determine zone validity. By using the standard deviation of price (controlled by the Volatility Lookback), the script ensures that the "match tolerance" between two swing points adapts to current market conditions.

The Volume Balance feature utilizes lower timeframe (LTF) data through the requestUpAndDownVolume function. By sampling data at a higher granularity than the current chart, it estimates the internal buying and selling pressure that occurred between the two pivot points that defined the zone.

Settings

S/R Zone Settings

• Time Horizon: Determines the number of bars used to define a pivot high or low.
• Volatility Lookback: The period used to calculate the standard deviation for matching tolerance.
• Zone Match Tolerance: Multiplier for the volatility calculation; higher values make it easier for two swings to form a zone.
• Swing Memory: The maximum number of historical swing points the script remembers for potential zone matching.

Volume Balance

• Allow Seconds: Enables the script to pull second-based data for more precise volume analysis on low timeframes.
• Bar Granularity: Controls the depth of the lower-timeframe sampling.

Zone Management

• Avoid Overlapping Zones: Prevents the chart from becoming cluttered by skipping new zones that intersect with existing ones.
• Zone Expiration: The number of bars after which a zone is automatically removed.
• Maximum Active Zones: Limits the total number of visual objects to maintain performance.

FAQ

How do I interpret the buy/sell bars inside the zones?

The bars represent the ratio of volume during the formation of the zone. If the green bar is significantly longer than the red bar, it suggests that the level was formed with aggressive buying interest.

What constitutes a "clean" retest signal?

For a signal to trigger, price must first move completely beyond the zone (a breakout), then close back toward it, and finally touch the zone area again. This confirms the level has "flipped" from resistance to support or vice versa.

How can I access Support and Resistance Retest Breakout Signals?

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