Support and resistance channels

The Support and resistance channels indicator identifies key pivot points and generates dynamic zones based on candle wicks to highlight significant supply and demand areas. By visualizing these levels through extended lines and channels, traders can more effectively monitor potential breakouts or reversals at critical price junctures.

Usage

This tool can be used to identify trend exhaustion and potential entry zones. The "Wick Channels" provide a more comprehensive view of resistance and support than single lines by encompassing the price action between the candle body and the high/low.

• Resistance Identification: Red lines and channels are drawn from high pivots. Look for price rejection within these zones or a breakout above for trend continuation.
• Support Identification: Green lines and channels are drawn from low pivots. Traders may look for buying opportunities within these zones or watch for a breakdown as a sign of bearish strength.
• Historical Analysis: When a level is breached or swept, the indicator can leave a historical mark, allowing you to see where previous levels were respected before being invalidated.

Details

The script utilizes pivot high and low detection logic based on a user-defined length. To ensure the relevance of these levels, a "Clean Check" mechanism scans a specific lookback period to ensure the pivot level hasn't already been invalidated by price action.

The wick channels are constructed by taking the range between the pivot candle's extreme (High/Low) and its closest body value (Open/Close). This area often represents a zone of localized liquidity or intense selling/buying pressure. The indicator also tracks "Sweeps" (where price moves past a level but closes back within it) and "Breaks" (where price closes beyond the level) separately for alert and historical purposes.

Settings

Pivot Detection Settings

• Pivot Timeframe: Determines the timeframe used for pivot calculations. Leave empty to use the current chart timeframe.
• Pivot Length: The number of bars required on either side of a high or low to confirm a pivot point.
• Lookback for Clean Check: The number of bars the script checks to ensure a pivot is still "fresh" and has not been crossed by price.

Pivot Line Appearance

• High/Low Line Color: Customizes the colors for resistance and support levels.
• Line Width/Style: Adjusts the visual thickness and style (Solid, Dashed, Dotted) of the extended levels.

Wick Channel Settings

• Show Wick Channels: Toggles the visibility of the shaded boxes representing the wick range.
• Channel Transparency: Controls the opacity of the channel background.
• Show Price Labels on Y-axis: Displays the price levels of active channels on the chart's vertical scale.

Alerts

• Enable Alerts: Enables notification triggers for new pivots, level breaks, and liquidity sweeps.

Historical Lines

• Show Historical Lines: Displays levels for a set duration after they have been broken.
• Number of Bars to Keep Historical Lines: Sets how long a broken level remains visible.
• Break/Sweep Historical Line Color: Specific colors to differentiate between a full candle close break and a wick sweep.

FAQ

How do I access Support and resistance channels?

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

What is the difference between a break and a sweep?

A break occurs when the candle close is beyond the identified pivot level, indicating a shift in market structure. A sweep occurs when only the wick passes the level, often indicating a liquidity grab before a reversal.

Can I use this on different timeframes?

Yes, the indicator includes a "Pivot Timeframe" setting, allowing you to view higher timeframe support and resistance levels while trading on a lower timeframe.