Organic Support and Resistance

The Organic Support and Resistance indicator is an automated technical analysis tool that identifies key price levels using the EMA of price change multiplied by relative volume as a basis for pivot detection. This approach allows for a more organic identification of support and resistance zones based on market conviction and liquidity rather than simple price action alone.

Usage

The tool plots horizontal lines representing support (green) and resistance (red) levels directly on the chart.

• Identifying Strength: The indicator calculates the "strength" of each level by comparing a fast EMA to a slower EMA. Stronger levels are displayed with higher opacity, while weaker levels appear more transparent.
• Dynamic Snapping: The script includes a "gravity" feature where multiple levels in close proximity are merged into a single, weighted average price level, reducing chart clutter.
• Timeframe Scaling: The tool automatically adjusts its distance parameters when moving to higher timeframes (4H, Daily, Weekly, Monthly) to provide a broader "bird's eye view" of the market structure.
• Labels: Labels are drawn near the candles to show the exact price and the percentage distance from the current market price.

Details

The core logic relies on a custom calculation: Price Change * (Volume / EMA(Volume)). By applying an EMA to this value, the script finds pivot points where price movement was backed by significant relative volume.

When a pivot is found, the script checks for "closest" existing lines within a user-defined gravity distance. If a nearby level exists, the two are merged using a strength-weighted average. This ensures that the most significant historical levels exert more "pull" on the plotted lines.

Settings

• Pivot distance: Determines the lookback period for finding pivot highs and lows in the volume-weighted price change data.
• Max distance %: Sets the percentage range around the current price within which the indicator will calculate and display lines.
• Lines gravity distance %: The threshold within which two separate levels will "snap" together into a single merged level.
• Max label draw distance %: Controls how far back labels are drawn relative to the current bar.
• Distances multiplier (4H / DWM): Multipliers that increase the range and gravity settings for higher timeframes.
• Used price: Choose between Close, High/Low, or Average for the basis of the line calculation.
• Minimum/Maximum opacity: Controls the visibility range of the lines based on their calculated strength.
• Style Settings: Options to change line width, style (Solid, Dotted, Dashed), and colors for support/resistance.

FAQ

How do I interpret the transparency of the lines?

Levels with higher opacity represent "stronger" support or resistance based on the volume-weighted pivot calculation. Faint lines indicate minor levels that may have less historical significance.

Why do the levels move slightly when I change timeframes?

The indicator uses multipliers for higher timeframes to capture broader market structures. This ensures that on a Daily chart, you see major historical zones rather than minor intraday fluctuations.

How can I get access to this indicator?

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