Daily Range Support & Resistance Levels
Jul 21, 2023
The Daily Range Support & Resistance Levels indicator provides advanced analytical levels designed to assess daily price movements and project potential support and resistance zones. This tool calculates levels based on the historical average daily range and standard deviation from the opening price to help traders identify key areas for price reversals or breakouts.
Usage
The tool is primarily used to identify intraday volatility boundaries. By examining price fluctuations over a defined historical period, it projects two levels of resistance (R1, R2) and two levels of support (S1, S2) relative to the day's opening price.
- R1/S1 Levels: Represent the average daily price movement. These act as the first area where price might stall or find support/resistance.
- R2/S2 Levels: Incorporate a standard deviation multiplier to account for higher volatility days, providing wider boundaries for extreme price movements.
- Daily Open Line: Serves as the central anchor for the daily range calculations.
Traders can use these levels to set profit targets, place stop-losses, or identify exhaustion points in a trend. The indicator performs optimally on lower timeframes such as the 5-minute or 15-minute charts.
Details
The indicator calculates the average "up" and "down" movements over a lookback period (default 150 days).
- Up Movement: Percentage distance from the open to the daily high.
- Down Movement: Percentage distance from the open to the daily low.
The R1 and S1 levels are plotted by applying these averages to the current day's opening price. R2 and S2 levels add/subtract the standard deviation of these historical moves, adjusted by a user-defined multiplier, to the base average range. This statistical approach ensures that the levels adapt to the specific volatility profile of the asset being traded.
Settings
- Averaging Period: Determines the number of days used to calculate the historical average daily range.
- StDev Multiplier: Adjusts the sensitivity of the R2 and S2 levels. Higher values result in wider, more conservative levels.
- Show Support / Resistance Prices: Toggles the price labels for each level on the chart.
- Show Daily Open Line: Toggles the visibility of the daily opening price reference line.
- Show Previous Levels: Allows users to view historical support and resistance levels for backtesting purposes.
- Visual Customization: Includes options for line colors, line styles (Solid, Dashed, Dotted), and zone filling between levels.
FAQ
How do I access Daily Range Support & Resistance Levels?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
What timeframes work best for this indicator?
While the levels are based on daily data, the indicator is designed for intraday use, specifically on 5-minute and 15-minute charts.
What does the Daily Stats table show?
On the daily timeframe, the indicator can display a statistics table showing the historical frequency of price touching or closing above/below the calculated R and S levels.
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