OPEN-SOURCE SCRIPT
+ Stochastic S/R Zones
Hey, all. I have a new indicator here that displays zones on your price chart where the stochastic oscillator has moved out of overbought or oversold back into the range of the indicator that is bounded by those two levels.
I know there are many support and resistance indicators on TradingView already, at least a couple of which use the RSI in a similar way as I am using the stochastic here, but I still believe this is a fairly novel interpretation of the stochastic, and it is, in my opinion, a better oscillator than the RSI to be used in this way.
In addition to the zones being plotted on the chart, the indicator also, optionally, can color candles or plot shapes above candles when the 50 line is crossed, so if you want to use this as a simple momentum indicator without desire of having the below chart indicator taking up screen space, you're pretty much covered on the typical signals you might want from it (with the exception of %K / %D crosses, but there are alerts for that).
Visually, it is a simple, clean indicator. There are the zones, and then candle colors or shapes if you opt to add those. These zones are actually drawn from the candle preceding the cross over or cross under. Reason for that is often times the candle of the cross is fairly impulsive and exiting a consolidation. That period of consolidation is what is important to highlight, at least as far as I am concerned. The zones themselves extend until they are broken by a candle. A support zone stops at the candle that closes below its low. Vice versa for a resistance zone.
Usage is fairly simple. All the standard stochastic inputs are available for you to adjust to your heart's content. Additionally, you can choose either the %K or %D line to use as the source from which the zones are drawn, candles are colored, and shapes are plotted. Not sure if this will matter to most people, but I figured it should be made available.
This should be obvious, but I feel it must be said, just because an oscillator (any oscillator) has exited overbought or oversold does not mean that there must be a reversal (or in the case of a trend pullback, continuation). The oscillator can always simply immediately move back into overbought/sold. Just because a support box prints does not mean you should mortgage your house on a long trade. In strong trends, and depending on your oscillator settings, the indicator might draw a box then only a couple of candles later break it, continuing on with the trend. This of course is telling you something, and you would be wise to listen. As with all things trading, context is important.
Here are a few extra screens for you.
I really hope you all like this. It's been ages since I've created anything new, and despite its simplicity and the few lines of code that make it up, it took a lot of work, as I am a poor coder.
Enjoy,
Scott
I know there are many support and resistance indicators on TradingView already, at least a couple of which use the RSI in a similar way as I am using the stochastic here, but I still believe this is a fairly novel interpretation of the stochastic, and it is, in my opinion, a better oscillator than the RSI to be used in this way.
In addition to the zones being plotted on the chart, the indicator also, optionally, can color candles or plot shapes above candles when the 50 line is crossed, so if you want to use this as a simple momentum indicator without desire of having the below chart indicator taking up screen space, you're pretty much covered on the typical signals you might want from it (with the exception of %K / %D crosses, but there are alerts for that).
Visually, it is a simple, clean indicator. There are the zones, and then candle colors or shapes if you opt to add those. These zones are actually drawn from the candle preceding the cross over or cross under. Reason for that is often times the candle of the cross is fairly impulsive and exiting a consolidation. That period of consolidation is what is important to highlight, at least as far as I am concerned. The zones themselves extend until they are broken by a candle. A support zone stops at the candle that closes below its low. Vice versa for a resistance zone.
Usage is fairly simple. All the standard stochastic inputs are available for you to adjust to your heart's content. Additionally, you can choose either the %K or %D line to use as the source from which the zones are drawn, candles are colored, and shapes are plotted. Not sure if this will matter to most people, but I figured it should be made available.
This should be obvious, but I feel it must be said, just because an oscillator (any oscillator) has exited overbought or oversold does not mean that there must be a reversal (or in the case of a trend pullback, continuation). The oscillator can always simply immediately move back into overbought/sold. Just because a support box prints does not mean you should mortgage your house on a long trade. In strong trends, and depending on your oscillator settings, the indicator might draw a box then only a couple of candles later break it, continuing on with the trend. This of course is telling you something, and you would be wise to listen. As with all things trading, context is important.
Here are a few extra screens for you.
I really hope you all like this. It's been ages since I've created anything new, and despite its simplicity and the few lines of code that make it up, it took a lot of work, as I am a poor coder.
Enjoy,
Scott
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