Support and Resistance V2

The Support and Resistance V2 indicator is a technical analysis tool designed to automatically identify and project short-term and long-term support and resistance levels based on historical price action.

Usage

This indicator can be used to identify key pivot zones where price is likely to react. It plots two distinct layers of support and resistance:

• Short-Term Levels: Thinner lines representing immediate areas of price congestion and local pivots.
• Long-Term Levels: Thicker, shaded lines representing more significant structural pivots.
• Trade Zones: The indicator calculates a "Trade Limit" area near the short-term levels based on a percentage of the overall range, helping traders identify optimal entry zones near structural boundaries.

Traders can look for breakouts above resistance or breakdowns below support as trend continuation signals, or use the established zones as potential targets for mean reversion strategies.

Details

The script functions by evaluating highest highs and lowest lows over two user-defined lookback windows.

• Window 1 (Short-Term): Determines the "Short Term Top" and "Short Term Bot."
• Window 2 (Long-Term): Determines the "Long Term Top" and "Long Term Bot."

The tool includes an "Alternative Source" feature, which allows the script to calculate these levels using a single price point (like the close) instead of the standard high/low method. This can be useful for smoothing out volatility or filtering out "wicks" from the structural analysis.

Settings

• Use alternative source?: Toggle to use the "Alternative source" input for calculations instead of High and Low.
• Alternative source: The price source used if the alternative toggle is enabled (e.g., close, hlc3).
• Lookback Window 1: The period used to calculate short-term support and resistance levels.
• Lookback Window 2: The period used to calculate long-term support and resistance levels.
• Percent of the range to use for trade zone: Defines the width of the trade limit zone as a percentage of the total range between support and resistance.

FAQ

How do I interpret the thicker lines?

The thicker lines represent long-term support and resistance levels. These are derived from a larger lookback window and typically represent more significant market structure than the thinner short-term lines.

What are the circular markers on the chart?

The circular markers indicate the specific point in time where a new long-term support or resistance level was established or changed.

How can I get access to Support and Resistance V2?

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