Horizontal price levels can form powerful support and resistance zones because many traders use them. However, they can be time consuming to analyze.
This unique indicator analyzes historical prices to identify support and resistance zones, as well as calculates how strong they were based on how many times price had reversed at those levels.
It does this by dividing historical data into price zones to allow for variations in reversal points around key levels. The indicator considers an opposite move larger than a threshold number of zones to be a reversal. Each reversal which takes place at a previously identified support or resistance zone will add to that level’s strength and each move through a zone will reduce its strength.
Strengths are shown on the chart as rectangles of different colour intensity. Support is green, resistance is red and blue represents zones which have recently been both support and resistance. There is an option to display the actual strength values in the zone rectangles.
The size of the support/resistance zones, as well as the size of the threshold needed to detect reversals, can be customized.
The indicator also has a feature called ‘multi-zone heat map’ which gives an overview of the support/resistance areas on the chart using multiple zone sizes drawn at once. Areas with the strongest color intensity over multiple zone sizes have had the strongest support/resistance in the past.
The following inputs are available in the indicator’s parameters window and can be defined by the app user:
The application displayed on this page does not take in to consideration your individual personal circumstances and trading objectives. Therefore it should not be considered as a personal recommendation or investment advice. Past performance is not indicative of future results. There is no guarantee that the systems, trading techniques, trading methods, and/or indicators will result in profits or not result in losses.
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