Trend Lines v2

The Trend Lines v2 indicator automatically identifies and draws significant support and resistance trend lines by connecting historical pivot points to highlight potential price reversals and breakouts.

Usage

The Usage section describes how the script can be used to identify market structure. The tool automatically scans for the most recent Pivot Highs and Pivot Lows to construct trend lines that have not yet been breached by price action.

• Bullish Trend Lines: The indicator identifies a series of higher pivot lows and connects them to form an ascending support line. These are colored green by default and suggest areas where buying pressure may emerge.
• Bearish Trend Lines: The indicator identifies lower pivot highs and connects them to form a descending resistance line. These are colored red by default and suggest areas where selling pressure may reside.
• Breakout Detection: The script monitors real-time price action against these lines. If a candle closes across a line, it is considered "broken," and the script can trigger alerts to notify the user of a potential trend shift.

Details

The script operates by storing the last several Pivot Points (PP) in arrays. For every new bar, it executes a search algorithm that attempts to draw a line from the most recent pivot point back through previous pivots.

The calculation follows these steps:

1. Pivot Identification: It finds the last 10 (or user-defined) Higher and Lower Pivot Points based on the "Pivot Period" setting.
2. Validity Check: For each potential line, the script iterates through every bar between the pivot points to ensure no price data has "broken" the line. A line is only considered valid if the price has remained above (for support) or below (for resistance) the projected slope.
3. Optimization: To maintain performance and stay within execution time limits, the script stops searching once a valid continuous trend line is found for a specific pivot.
4. Slope Calculation: The slope is determined by the price difference between the two chosen pivot points divided by the time distance (bar index) between them.

Settings

• Start Year/Month/Day: Defines the starting point on the historical chart where the indicator begins its calculations.
• Pivot Period: Determines the lookback and lookforward period used to identify a pivot point. A higher value results in more significant, longer-term trend lines, while a lower value identifies shorter-term trends.
• Number of Pivot Points to check: Sets how many historical pivot points the script evaluates to find a valid trend line connection.
• Up Trend Color: Sets the color for ascending support trend lines.
• Down Trend Color: Sets the color for descending resistance trend lines.

FAQ

How do I adjust the indicator if the chart looks too crowded? You can increase the "Pivot Period" setting to focus on more significant market turns or reduce the "Number of Pivot Points to check" to limit the quantity of lines being calculated.

Why are there no trend lines appearing on my current view? If no lines are visible, it likely means the current price action has broken all recently identified lines. Try adjusting the "Pivot Period" to a different value to capture different market cycles.

How can I get access to the Trend Lines v2 indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.