Support Resistance Classification

The Support Resistance Classification trading indicator is an innovative tool designed for identifying key support and resistance levels using higher time-frame (HTF) data. What sets this indicator apart is its ability to classify these levels based on their strength, ranking them from 1 to 10. Interestingly, lower values indicate stronger support and resistance levels, providing traders with clear insights into market dynamics over a specified lookback period.

Unlike the Support Resistance Classification (VR) [LuxAlgo] indicator, this version does not incorporate visible range functionality, focusing instead on a preset lookback period to establish these critical market levels. Due to the incompatible techniques, LuxAlgo offers this distinct NON-VR version to cater to advanced chart analysis without overlaying both methods within a single script.

How to Use the Support Resistance Classification Indicator?

For traders utilizing higher timeframes, this indicator serves as a strategic advantage by identifying long-term support and resistance levels that can subsequently be applied to lower timeframes. The classification algorithm analyzes these levels within a defined range, where a score of 1 implies a robust support/resistance and 10 denotes a comparatively weaker mark.

By marking these levels visually on your charts using shortcuts like alt + h, traders can set up for anticipated price movements and trend reversals, leveraging historical performance for future setups.

This methodical assessment of level strength ensures that breaks are consistently evaluated on the complete line, guaranteeing precise breakout analysis regardless of whether 'value' or 'entire line' settings are active.

In-depth Examination

The foundation of this indicator lies in its computational abilities within the last <Lookback> bars, defining the operational period from the blue vertical marker to the current candle:

Utilizing non-broken swings enhances the indicator's forecasting potential, promoting accurate break calculations beyond mere swing assessments, even when alternative value settings are implemented.

Customizing Your Analysis with Settings

Lookback: Defines the range of bars back from the current tick to calculate support and resistance.

Fade: Determines invisibility timings post a specified number of break occurrences.

Value:

• value:

  • SMA, upper/lower: Breaks are determined based on the moving average.
  • Fibonacci Pivot Point levels, Previous High, Previous Low: Uses last HTF figures for break analysis.
  • Swings (detailed in SWING SETTINGS).

• line:

  • SMA, upper/lower: Complete line break assessment, focusing on its latest reading.
  • Fibonacci Pivot Point Levels, Previous High, Previous Low: Comprehensive line break analysis based on its latest reading.
  • Swings (detailed in SWING SETTINGS).

Swing Settings

Swings are uniquely timed to the current chart timeframe, with no HTF adjustments applicable.

• Left/Right: For calculating swings (pivothigh, pivotlow).
• Show: Allows visualization of pivot points to enhance chart analysis.

Setting Adjustments

• N°: Specify the targeted number.
• TYPE:
  • SMA (Simple Moving Average)
  • Previous High/Low
  • Upper/Lower (Bollinger Bands)
  • Pivot Point levels: "Fibonacci"
• LENGTH: Defines bars needed for calculation (applicable to SMA, upper/lower).
• MULT: Standard deviation factor (only for upper/lower - BB).
• HTF: Higher Time Frame settings (applicable to SMA, upper/lower, Previous High/Low, Fibonacci).

Visual Customization with Value Display

Traders can make up to five different values visible on their charts for verification purposes, excluding swings (refer to SWING SETTINGS). This visibility adjustment is useful for verifying potential setups or when deciding on an appropriate value configuration.

Frequently Asked Questions

How can I access the Support Resistance Classification Indicator?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Why are lower classification values stronger levels?
Lower values typically indicate areas with more significant historical trading activity, suggesting stronger future price response.

Can I use this indicator with others simultaneously?
Yes, it can complement other tools for more comprehensive market analysis, though the NON-VR and VR versions should be used separately.