Dynamic Pivot Point

Dynamic Pivot Points [DPP]

Description
Concept This script provides a comprehensive support and resistance system by calculating Dynamic Pivot Points based on a user-defined timeframe and lookback period. Unlike static pivot tools that only look at the previous candle, this indicator allows traders to customize the "Pivot Period" (defaulting to 5), offering a more flexible approach to identifying market structure across different resolutions.

How It Works The indicator calculates a central Pivot Point (P) alongside three levels of Support (S1, S2, S3) and three levels of Resistance (R1, R2, R3).

Calculation Logic: The central pivot is derived from the average price (High, Low, and Close) over the selected timeframe and period.

Support & Resistance: These levels are projected above and below the central pivot, calculated based on the volatility (price range) of the selected period.

Multi-Timeframe (DPP) Capability: The script allows you to view higher-timeframe levels (e.g., Weekly or Monthly) while trading on a lower-timeframe chart (e.g., 15-minute or 1-hour), ensuring you are always aware of the macro trend levels.

How to Use Traders can use this tool to identify potential reversal zones, breakout levels, and the general trend bias.

Trend Confirmation:

Bullish Bias: If the price is sustaining above the central Pivot Line (White), the market is generally considered to be in an uptrend.

Bearish Bias: If the price remains below the central Pivot Line, the market is likely in a downtrend.

Reversal Trading:

Support Levels (Green): Look for bullish reversal signals (such as hammer candles or divergence) near S1, S2, or S3. These are potential "Buy" zones.

Resistance Levels (Red): Look for bearish rejection signals near R1, R2, or R3. These are potential "Sell" zones.

Breakout Trading:

A strong volume push above Resistance (R1-R3) may indicate a bullish breakout.

A breakdown below Support (S1-S3) may signal a bearish continuation.

Settings

Pivot Timeframe: Select the specific resolution for the calculation (e.g., Daily, Weekly).

Defined Period: Adjust the lookback length for the calculation (Default: 5).

Visibility: Toggles to show/hide specific levels based on your chart cleanliness preference.

Note: This script does not guarantee future performance. Pivot points are lagging indicators derived from historical price action and should be used in conjunction with other forms of analysis.