This script is designed to help traders identify critical support and resistance levels on a chart with increased flexibility. By allowing separate control over the tolerance levels for support and resistance, the script ensures that you can fine-tune these key levels to more accurately reflect market conditions, even when minor breaches occur. This tool is particularly valuable for traders who want to capture robust levels that have been tested multiple times, while still accounting for the natural fluctuations in price action.
Key Features:
Customizable Lookback Period:
Users can define the lookback period, controlling how far back the script examines price data to identify support and resistance levels. This feature allows you to focus on recent price action or incorporate a longer-term perspective.
Pivot-Based Detection with Independent Tolerances:
The script identifies support and resistance levels based on pivot points within the lookback period. Importantly, it allows separate tolerance settings for support and resistance, enabling you to adjust how strictly the script treats small price breaches.
Dynamic Level Plotting:
Identified support, resistance, and middle levels are plotted directly on the chart. These levels are dynamically updated as new price data becomes available, ensuring that the plotted levels remain relevant over time.
Separate Tolerance for Support and Resistance:
Support Tolerance: This setting allows you to specify how much the price can breach below a support level before it is no longer considered valid. This is useful in capturing broader support zones that can absorb minor dips.
Resistance Tolerance: Similarly, you can adjust how much the price can breach above a resistance level before it is invalidated, helping to identify strong resistance areas that might see temporary spikes.
Visual Trading Signals:
The script provides clear visual signals when the price touches and reverses from the support level (buy signal) or crosses below the stop-loss level (sell signal). These signals can assist traders in making timely and informed trading decisions.
Configurable Line Length:
You can define the length of the lines that plot the support and resistance levels on the chart, allowing you to visualize these key levels over your desired time frame.
How to Use:
Set the Lookback Period: Adjust the lookback parameter to control how much historical data is used to detect support and resistance levels. A longer period may capture more significant levels, while a shorter period focuses on recent action.
Adjust Support and Resistance Tolerances: Fine-tune the supportTolerance and resistanceTolerance parameters to allow or disallow minor price breaches, depending on how strict you want to be with level validation.
Interpret the Plotted Levels: Use the dynamically updated support, resistance, and middle levels to guide your trading decisions, keeping in mind the tolerances you’ve set.
Act on Trading Signals: Utilize the buy and sell signals provided by the script to execute trades around these key levels, with the confidence that the levels have been robustly tested.
Ideal for:
Swing Traders: Who need to identify and trade around significant support and resistance levels that might experience minor breaches.
Day Traders: Who require dynamic and adaptable levels that reflect recent price movements.
Technical Analysts: Seeking a reliable and customizable tool to plot and adjust key price levels based on real market conditions.
This script offers a powerful way to identify and trade around key price levels, providing the flexibility needed to adapt to various market scenarios. Whether you’re looking for more accurate support and resistance detection or need a tool that can handle the nuances of price fluctuations, this script is designed to meet your needs.