Support & Resistance

The Support & Resistance indicator identifies and projects key price levels based on historical pivot highs and lows to assist traders in finding potential zones of price reversal or breakout.

Usage

The tool can be used to visualize significant horizontal price levels that have historically acted as floors (support) or ceilings (resistance). Traders often use these levels to:

• Identify potential entry points when price bounces off a support level or pulls back to a resistance level.
• Set stop-loss orders below support or above resistance.
• Determine profit targets at the next available level.
• Spot breakouts when the price closes decisively beyond a plotted level.

The indicator dynamically changes the color of the levels based on the current market price; levels below the current price are typically treated as support (green), while levels above are treated as resistance (red).

Details

The script utilizes the ta.pivothigh() and ta.pivotlow() functions to find significant swing points in price action. It employs two different lookback configurations:

1. Quick Pivots: These use a shorter right-hand strength to detect more recent price action significance.
2. Standard Pivots: These use a longer lookback to find established historical levels.

By looking back through multiple occurrences of these pivots (up to three previous instances for standard pivots), the script maintains a total of eight active levels. Each level is projected forward horizontally using trackprice=true, ensuring they remain visible on the right side of the chart for real-time analysis.

Settings

• Pivot Left Strength (Internal): The number of bars to the left required to confirm a pivot point.
• Pivot Right Strength (Internal): The number of bars to the right required to confirm a pivot point.
• Quick Right Strength (Internal): A reduced right-hand lookback used specifically for identifying immediate price levels.

FAQ

How do I interpret the colors?

When the current market price is above a level, it is colored green to represent potential support. When the price is below a level, it is colored red to represent potential resistance.

Does this indicator provide alerts?

Yes, the script includes a built-in alert system that triggers whenever the closing price crosses any of the eight identified support or resistance levels.

How can I access this tool?

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