MM-PA

The MM-PA indicator tracks reversal price levels across any asset to identify key support and resistance zones based on historical price rank and proximity.

Usage

The indicator identifies potential reversal points by analyzing the percent rank of the closing price over a specified lookback period. When the price reaches an extreme (0 or 100) and then moves away by a user-defined percentage, a support (Base) or resistance (Top) level is established.

Users can leverage these levels in several ways:

• Support and Resistance: Use the horizontal lines as potential areas for entries or exits.
• Trend Confirmation: The color of the levels changes based on the current price position; green indicates price is above the level, while red indicates price is below.
• Strength Assessment: There are three levels for both Bases and Tops (1, 2, and 3), allowing users to filter for stronger or weaker reversal signals based on the percentage thresholds.

Details

The script uses a specialized function to determine the suitability of a level. It checks historical price action within a "Comparison Length" to see how often high, low, or close prices have interacted with the potential level within a certain "Precision" threshold. This ensures that the identified levels have historical significance before being plotted on the chart.

The thresholds for identifying these levels adapt based on the timeframe:

• Monthly: Requires fewer historical interactions to validate a level.
• Weekly/Daily: Requires a moderate number of interactions.
• Intraday: Requires the highest number of historical interactions to filter out market noise.

Settings

Periods

• Monthly Period: The lookback length used for percent rank calculations on monthly timeframes.
• Weekly Period: The lookback length used for percent rank calculations on weekly timeframes.
• Day & Intraday Period: The lookback length used for percent rank calculations on daily and lower timeframes.

Calculation Parameters

• Comparison Length: The historical window (number of bars) used to check for price interactions to validate a level.
• Precision: The percentage proximity required for a historical price point to be considered an interaction with the level.
• BASE & TOP Percents (1, 2, 3): The percentage change required from the extreme (0 or 100) to trigger the formation of a reversal level.

FAQ

How do I use the different levels?

Levels 1, 2, and 3 correspond to different percentage requirements. Level 3 typically requires a larger move away from the extreme, often making it a more significant zone than Level 1.

Why do some levels disappear or change color?

The levels are plotted based on the current price relationship. If the price crosses a level, the color will switch between green (support/above) and red (resistance/below).

How can I access MM-PA?

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