Support & Resistance Dynamic [LuxAlgo]

The Support & Resistance Dynamic indicator aims to return real-time predictive support and resistance zones that are relevant to a detected trend. This makes this indicator similar to our previously published Predictive Ranges indicator.

Users can additionally extend the most recent historical support and resistance zones.

🔶 USAGE



Hypothetical resistance levels in an up-trend or supports in a down-trend would tend to be broken more easily, as such the indicator primary objective is to return reliable real-time support and resistance levels by taking this into account.



When the market is up-trending the indicator will only return support zones, while a down-trending market will cause the indicator to only return resistance zones.



If the price significantly breaks a support/resistance, rendering it unreliable, it can be a sign of a potential reversal.



Users can return support/resistance levels/zones for shorter-term trends by reducing the Multiplicative Factor setting.

🔹 Extension



Users can extend past estimated support/resistance levels, the amount of extended levels is determined by the users. Certain levels can stay relevant in the future, and can also aid in measuring the significance of a breakout, with further past levels being reached being indicative of more significant trends.

🔶 DETAILS

To determine if the price is up-trending or down-trending in order to show either support or resistance, the same method used in the predictive ranges script is used. A central tendency is estimated, if price significantly deviates from it upward an uptrend is detected, else a significant deviation downward would indicate a downtrend.

The central tendency estimate is used for the construction of the support and resistance levels.

🔶 SETTINGS

• Multiplicative Factor: Determines the frequency at which new supports/resistances are returned, with lower values returning more frequent levels/zones.
  
• ATR Length: ATR averaging length used as deviation threshold for the central tendency estimate.
  
• Extend Last: Determines the amount of most recent historical supports/resistances to extend to the latest bar.