Support/Resistance With Breaks & Bounces
May 28, 2022
The Support/Resistance With Breaks & Bounces indicator identifies key pivot-based levels and automatically detects the first occurrence of breakouts or price rejections from these levels.
Usage
This tool is designed to simplify price action analysis by highlighting significant supply and demand zones. Users can monitor the most recent green (support) and red (resistance) lines for potential trade setups:
- Breakouts: A "Break" label appears when price closes beyond the current support or resistance level for the first time.
- Bounces: A "Bounce" label appears when price touches a level and produces an engulfing candle in the opposite direction without breaking through.
Only one breakout and one rejection are allowed per line to maintain clarity. When a new pivot is detected, the previous line stops updating, and the focus shifts to the newly established level.
Details
The script utilizes the pivothigh and pivotlow functions to determine the placement of horizontal levels. It is built using an array-based architecture, ensuring that calculations for crossovers and candle patterns (like engulfing candles for bounces) are handled efficiently. When a new level is formed, the script visually adjusts the previous line backwards to prevent chart clutter, ensuring the most relevant data is always prominent.
Settings
Main Settings
- Pivot Method: Selects whether to calculate support and resistance levels based on the "Candle Wicks" (highs/lows) or "Candle Body" (open/close).
- Sensitivity: Determines the number of bars required to the left and right of a point to confirm a pivot. Higher values result in more significant but fewer levels.
Style Settings
- Line Width: Adjusts the thickness of the support and resistance lines displayed on the chart.
FAQ
How do I interpret the colors?
Red lines and labels indicate resistance-related events, while green lines and labels indicate support-related events.
Why did a line stop extending?
Lines stop updating as soon as a new pivot level is identified by the sensitivity settings, ensuring the indicator always tracks the most recent price structure.
How can I access this script?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
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