Volume-based S/R Levels

Jan 15, 2021

█ OVERVIEW

After my last indicator "Order Block Finder" was unexpectedly popular with the TradingView community, I decided to publish another experimental indicator which again tries to identify "areas of interest"

Idea:
Often candles with long wicks represent strong buying & selling pressure, especially when they are combined with extraordinary volume. Especially interesting to me are the lower wicks on red candles and the upper wicks of green candles. These wicks can potentially indicate "areas of interest" by the bigger players in the market and price may interact with these levels again in the future.
This indicator tries to identify these "high volume / long wick" candles and paints a line of either Support or Resistance from the wick into the future.



█ CALCULATION LOGIC

Extraordinary Volume is identified by first calculating thresholds based on a volume Moving Average and Standard Deviations. Two Standard Deviation Values are entered to identify HIGH and EXTREME threshold levels. The current volume is classified by comparing the volume against these thresholds.

The following inputs can be made:
- Volume MA Length
- Standard Deviation Length
- Threshold for HIGH Volume (Number of StdDev)
- Threshold for EXTREME Volume (Number of StdDev)

Another entry parameter can be used to specify the Minimum Wick Length (in % of the candle body value) which identifies a "relevant" candle. If this value is set to 0, then there is no limit and all high volume candles are considered.

The identified Support/Resistance levels are shown as lines on the chart. The parameter "Length of lines (hours)" can be used to set the length of the lines (always in hours). Depending on the timeframe, this needs to be adjusted.
(I know that this can be solved more elegantly in pine, but it was just not important to me. As always everyone is free to copy the code and make improvements. Just give me a mention when you do.)



█ DISPLAY OPTIONS

Different display options are available in the settings:

- Display Support/Resistance: Select if you want to see only Support or Resistance lines - or both
- Display High/Extreme Volume: Select if you only want to see the Extreme Value Candles or the High Value Candles or both
- Display WICK / WICK Range: Select if you only want one line at the extreme value (High/Low) of the wick - or if you want to see a range (three lines - one at the top, one at the bottom and one in the middle of the wick)
- Show Signal Triangles?: This gives the option to show little triangles on all the identified candles



█ DISCLAIMER

This is an experimental indicator and I do not know if my theory works in real life. So treat this not as financial advise, but purely for entertainment and educational purposes.
As mentioned above, I publish this code open so that everyone can re-use it or hopefully even improve it.


Let me know if you have any ideas for improvement and if it is within my coding capabilities (which to be honest are quite limited), I will try to accomodate it.

Have fun.

Jan 28, 2021

Release Notes

Changed Functionality:
- "Length of Lines" is now specified in "Number of Candles" and is working on any timeframe
- "Line Color Intensity" can change in the settings (Strong / Weak)