Key Zone$ - Support and Resistance

The Key Zone$ - Support and Resistance indicator is a comprehensive technical analysis tool designed to identify high-quality bounce and rejection setups at historically significant price levels. By analyzing six months of price action, it automatically plots supply and demand zones that have been validated by multiple touches, providing a robust framework for intraday and 0DTE trading.

Usage

The indicator can be used to identify precise entry points by combining structural support and resistance with momentum and volume confirmation. It is specifically optimized for liquid assets like SPY, QQQ, and SPX on a 5-minute chart.

• Trade Confirmation: Signals are generated only when price interacts with a confirmed zone and shows a strong rejection candle.
• Time Windows: The script filters for high-probability trading windows (typically the market open and close) to avoid low-volatility midday price action.
• Momentum Alignment: Integrated MACD and VWAP filters ensure that trades are aligned with institutional order flow and prevailing momentum.
• Risk Management: Every signal automatically plots an entry price, stop loss (based on the zone edge with an ATR buffer), and a default 2:1 reward-to-risk target.

Details

The script constructs zones using 15-minute pivot highs and lows, requiring at least three touches for a zone to be considered "confirmed." Nearby zones are merged automatically to maintain chart clarity. Unlike standard daily levels, these zones represent higher-quality structural levels derived from a 180-day lookback.

The entry logic is strictly filtered by Relative Volume (RVOL), applying higher thresholds for "PUT" signals due to the urgency often associated with downside moves, and lower thresholds for "CALL" signals to accommodate gradual price appreciation.

Settings

Zone Logic

• Zone Source TF (pivots): The timeframe used to calculate historical pivot points.
• Lookback days: The number of days to analyze for zone formation (default is 180 days).
• Touches to Confirm: The minimum number of price interactions required to validate a zone.
• Zone Thickness (ATR Mult): Controls the vertical width of the zones based on volatility.

Filters & Confirmation

• Only signal in windows: Restricts signal generation to the specified market open and close sessions.
• Require MACD confirmation: Enables/disables the momentum filter.
• VWAP confirmation: Determines if price must reclaim or simply be on one side of the VWAP for a signal to trigger.
• Require volume confirmation (RVOL): Enables the relative volume filter, with separate thresholds for CALL and PUT opportunities.

Risk Management

• Target = R multiple: Sets the reward-to-risk ratio for the automated target level.
• Stop buffer (ATR fraction): Adds a small volatility-based buffer to the stop loss placement.

FAQ

How do I interpret the different zone colors? Green zones represent historical support areas where price has previously bounced, while red zones represent historical resistance areas where price has been rejected.

Why are some signals filtered out during the middle of the day? By default, the indicator uses "Time Windows" to focus on periods of high momentum and participation, reducing the likelihood of being caught in sideways "choppy" price action.

How can I access the Key Zone$ - Support and Resistance indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.