The Perfect Support & Resistance

The The Perfect Support & Resistance indicator identifies key market levels by correlating price pivots with overbought and oversold RSI conditions across multiple lookback periods and timeframes. It aims to provide traders with robust horizontal levels that represent significant areas of supply and demand based on historical momentum extremes.

Usage

The tool can be used to identify potential reversal zones or breakout levels. When the RSI reaches an overbought state and confirms a price peak within a specific lookback period, a resistance level is plotted. Conversely, when the RSI is oversold and a price trough is found, a support level is established.

Traders can use these levels as:

• Targets: Aiming for the next plotted support or resistance level.
• Entry Points: Looking for price action confirmation (like pin bars or engulfing candles) near the circles.
• Multi-Timeframe Analysis: By default, the script displays levels from two higher timeframes (5m and 30m), allowing users to see significant zones from a broader perspective while trading on lower timeframes.

Details

The script operates by tracking five distinct lookback zones (ranging from 10 to 200 periods). For each zone, it evaluates if the current RSI value is higher than the highest RSI in that lookback or lower than the lowest. If this condition coincides with the RSI being above the overbought threshold (70) or below the oversold threshold (30), the corresponding price high or low is captured as a level. These levels are requested using the request.security function to provide multi-timeframe insights.

Settings

RSI Settings

• RSI Length: The number of bars used to calculate the Relative Strength Index.
• Source: The price data used for the RSI calculation (default is Close).
• Overbought Threshold: The level above which the RSI is considered overbought (default 70).
• Oversold Threshold: The level below which the RSI is considered oversold (default 30).

Lookback

• Lookback zone 1 - 5: Defines the five window sizes (e.g., 200, 100, 50, 20, 10) used to find pivots and establish support/resistance levels.

HTF

• Timeframe1: The first higher timeframe from which levels are pulled (default 5m).
• Timeframe2: The second higher timeframe from which levels are pulled (default 30m).

FAQ

How do I interpret the circles on the chart?

The circles represent historical support and resistance levels. Circles above the current price generally act as resistance, while circles below act as support. The color changes based on whether the price is currently above or below those specific levels.

Can I change the strength of the levels?

Yes, by adjusting the "Lookback" settings. Larger lookback values (like 200) will result in more significant, longer-term levels, while smaller values (like 10) will capture more frequent, short-term fluctuations.

How can I access The Perfect Support & Resistance?

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