Ultimate Moving Average support&resistance

The Ultimate Moving Average support&resistance indicator provides a dynamic adaptive moving average that identifies potential trend reversals and key horizontal support and resistance levels.

Usage

The Usage section describes how the script can be used to identify market trends and pivot zones. This tool functions as both a trend-following moving average and a levels generator.

• Trend Identification: The primary moving average changes color based on the relationship between price and the average. Strong bullish momentum is typically represented by solid green, while strong bearish momentum is represented by solid red.
• Support & Resistance Mapping: By enabling S/R lines, the script identifies areas where the moving average has remained flat for a specific duration. These plateaus represent price consolidation and serve as historical support or resistance zones.
• Bar Coloring: Users can toggle bar coloring to match the momentum signals of the Ultimate Moving Average, allowing for easier visualization of trend shifts directly on the price action.

Details

The script is a derivative of the Ultimate Moving Average (UMA) developed by cheatcountry and RedKTrader, integrated with a support and resistance logic by lmatl. The UMA logic calculates an adaptive length based on the source's position relative to its standard deviation bands.

Key implementation details include:

• Adaptive Calculation: The indicator uses a variable length that adjusts based on price volatility. When price moves outside of a defined standard deviation range, the period adjusts to capture the trend more effectively.
• Momentum Weighting: It incorporates elements of RSI or MFI (depending on volume availability) to scale the weighting of the moving average, applying an exponential-like power to the calculation to increase sensitivity during high-momentum phases.
• S/R Logic: The support and resistance lines are generated when the moving average value remains constant for a user-defined number of bars, indicating a price equilibrium.

Settings

General Setting

• Source: The price data used for the calculation (default is Close).
• Resolution: Allows the user to calculate the indicator based on a different timeframe than the current chart.
• Allow repainting?: Determines if the indicator uses real-time data or waits for bar closes to prevent shifting values.
• Allow bar Color Change?: Toggles whether the chart candles are colored according to the trend signal.

Length Setting

• Accelerator: Adjusts the sensitivity of the weighting logic.
• MinLength: The minimum period allowed for the moving average calculation.
• MaxLength: The maximum period allowed for the moving average calculation.
• SmoothLength: The length of the final smoothing average applied to the UMA.

S/R Setting

• Show S/R lines?: Enables or disables the horizontal support and resistance levels.
• Line count: The maximum number of historical lines displayed on the chart.
• Candle Count: The number of bars the UMA must remain flat for a level to be drawn.
• Extend lines: Toggles whether horizontal lines continue to the right edge of the chart.
• Line color: Customizes the color of the S/R levels.
• Line thickness: Adjusts the width of the drawn lines.
• Line style: Sets the line appearance (Solid, Dotted, or Dashed).

FAQ

How do I interpret the color changes on the UMA? The colors represent trend strength. Darker green or red indicate strong directional momentum (price accelerating away from the average), while lighter shades indicate weaker or potentially exhausting trends.

What triggers the support and resistance lines? Lines are triggered when the adaptive moving average maintains a constant price level for the duration specified in the "Candle Count" setting, indicating a period of market stabilization.

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