Monthly Range Support & Resistance

The Monthly Range Support & Resistance indicator provides dynamic monthly analytical levels designed to assess price fluctuations and establish key supply and demand zones. By analyzing the average monthly movement over a user-defined period, the tool projects potential support and resistance levels from the current month's opening price, helping traders identify significant areas of interest for trend exhaustion or continuation.

Usage

The tool is best utilized on timeframes of 1 hour or higher to identify high-confluence zones based on monthly volatility.

• Identifying Zones: The script plots two resistance (R1, R2) and two support (S1, S2) levels. R1 and S1 represent the standard average monthly range, while R2 and S2 incorporate a standard deviation multiplier for wider, more conservative volatility zones.
• Monthly Open: The blue Monthly Open line serves as the central pivot. Price maintaining above or below this level can indicate the monthly directional bias.
• Statistical Analysis: On monthly charts, a statistics table provides data on how often price has touched or closed outside these levels historically, offering a probability-based perspective on current price action.
• Historical Context: Users can toggle previous levels to visualize how past monthly ranges acted as support or resistance in subsequent months.

Details

The indicator calculates the average "Up" and "Down" percentage fluctuations over a specific number of months (default is 7). These averages are then applied to the current monthly opening price.

• Standard Deviation: To account for periods of higher volatility, the script calculates the standard deviation of these fluctuations.
• Dynamic Updates: Levels are recalculated and projected at the start of every new monthly candle.
• Execution: The tool requires a minimum of a 60-minute timeframe to function correctly due to the intraday data needed to map these levels accurately across the month.

Settings

Primary Settings

• Averaging Period: Determines the number of previous months used to calculate the average range.
• StDev Multiplier: Adjusts the sensitivity of the R2 and S2 levels. A higher value results in wider levels to accommodate extreme volatility.

Visual Settings

• Show Support / Resistance Prices: Toggles the price labels on the right side of the levels.
• Show Monthly Open Line: Toggles the visibility of the current month's opening price.
• Line Styles: Customizable styles (Solid, Dashed, Dotted) for R1, R2, S1, and S2 lines.
• Show Previous Levels: Displays historical support and resistance levels on the chart.

Stats Table

• Show Stats on Monthly Chart: Enables a dashboard showing historical touch and close percentages.
• Table Position/Color: Adjusts the location (Top, Middle, Bottom) and appearance of the statistics table.

FAQ

How do I use the Monthly Range Support & Resistance?

The tool is used to identify potential reversal or breakout points based on historical monthly volatility. Traders often look for price exhaustion near the R2/S2 levels.

What timeframe should I use?

This indicator is designed for the 1-hour (60m) timeframe or higher. It will trigger a runtime error on lower timeframes to ensure calculation accuracy.

How do I get access to the Monthly Range Support & Resistance?

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