OPEN-SOURCE SCRIPT
Dynamic Support Resistance Strategy @tradingbauhaus
Dynamic Support Resistance Strategy tradingbauhaus
This script is designed to identify dynamic support and resistance levels on a trading chart based on pivots (highs and lows) detected over a specific period. It also includes a basic strategy logic to generate entry signals when the price breaks these support or resistance levels. Below is a step-by-step explanation of how it works:
How the Script Works:
Pivot Detection:
The script identifies pivots (highs and lows) using the pivothigh and pivotlow functions.
The period for detecting pivots is configurable (Pivot Period).
The source for pivots can be either High/Low (highs and lows) or Close/Open (close and open), depending on user selection.
Creation of Support and Resistance Channels:
The detected pivots are used to create dynamic support and resistance channels.
The maximum channel width is defined as a percentage (Maximum Channel Width %) of the price range over a 300-bar period.
Only channels containing a minimum number of pivots (Minimum Strength) are considered valid.
Visualization of Channels:
Support and resistance channels are plotted on the chart as shaded areas.
Channel colors are customizable:
Resistance: Red.
Support: Blue.
Channel (price inside): Gray.
Optionally, the detected pivots can be displayed on the chart.
Breakout Detection:
The script checks if the price breaks a support or resistance level.
If the price breaks a resistance level, a buy signal is generated.
If the price breaks a support level, a sell signal is generated.
Breakouts are visually marked with triangles (optional) and trigger alerts.
Moving Averages (Optional):
The script allows displaying two moving averages (SMA or EMA) with configurable periods.
These moving averages can be used as additional reference tools for analysis.
Strategy Logic:
When the price breaks a resistance level, the script enters a long position.
When the price breaks a support level, the script enters a short position.
Script Workflow:
Pivot Identification:
The script searches for highs and lows on the chart based on the configurable period.
These pivots are stored in arrays for later use.
Channel Creation:
For each pivot, the script calculates a support/resistance channel, ensuring it meets the maximum width and minimum pivot requirements.
Valid channels are stored and sorted by "strength" (number of included pivots).
Visualization:
Channels are plotted on the chart as shaded areas using the configured colors.
If enabled, pivots are marked on the chart with labels.
Breakout Detection:
The script checks if the price has broken a support or resistance level on the current bar.
If a breakout is detected, a signal is generated and optionally marked on the chart.
Strategy:
If the price breaks a resistance level, a buy signal is triggered.
If the price breaks a support level, a sell signal is triggered.
User Configuration:
The script allows customization of several parameters to adapt it to different trading styles and assets:
Pivot Period: Period for detecting pivots.
Source: Source for pivots (High/Low or Close/Open).
Maximum Channel Width %: Maximum channel width as a percentage of the price range.
Minimum Strength: Minimum number of pivots required to form a channel.
Maximum Number of S/R: Maximum number of channels to display.
Loopback Period: Lookback period for detecting pivots.
Colors: Customization of colors for resistance, support, and channel.
Extras: Options to display pivots, breakouts, and moving averages.
Example Use Case:
Chart Analysis:
On a daily chart, the script identifies key support and resistance levels based on pivots from the last 10 candles.
Channels are plotted as shaded areas, providing a clear visualization of key zones.
Breakout Trading:
If the price breaks a resistance level, the script generates a buy signal.
If the price breaks a support level, the script generates a sell signal.
Moving Averages:
If moving averages are enabled, they can be used as additional confirmation for signals.
Conclusion:
This script is a powerful tool for traders looking to identify dynamic support and resistance levels and capitalize on breakouts as trading signals. Its flexibility and customization make it suitable for a variety of assets and timeframes.
This script is designed to identify dynamic support and resistance levels on a trading chart based on pivots (highs and lows) detected over a specific period. It also includes a basic strategy logic to generate entry signals when the price breaks these support or resistance levels. Below is a step-by-step explanation of how it works:
How the Script Works:
Pivot Detection:
The script identifies pivots (highs and lows) using the pivothigh and pivotlow functions.
The period for detecting pivots is configurable (Pivot Period).
The source for pivots can be either High/Low (highs and lows) or Close/Open (close and open), depending on user selection.
Creation of Support and Resistance Channels:
The detected pivots are used to create dynamic support and resistance channels.
The maximum channel width is defined as a percentage (Maximum Channel Width %) of the price range over a 300-bar period.
Only channels containing a minimum number of pivots (Minimum Strength) are considered valid.
Visualization of Channels:
Support and resistance channels are plotted on the chart as shaded areas.
Channel colors are customizable:
Resistance: Red.
Support: Blue.
Channel (price inside): Gray.
Optionally, the detected pivots can be displayed on the chart.
Breakout Detection:
The script checks if the price breaks a support or resistance level.
If the price breaks a resistance level, a buy signal is generated.
If the price breaks a support level, a sell signal is generated.
Breakouts are visually marked with triangles (optional) and trigger alerts.
Moving Averages (Optional):
The script allows displaying two moving averages (SMA or EMA) with configurable periods.
These moving averages can be used as additional reference tools for analysis.
Strategy Logic:
When the price breaks a resistance level, the script enters a long position.
When the price breaks a support level, the script enters a short position.
Script Workflow:
Pivot Identification:
The script searches for highs and lows on the chart based on the configurable period.
These pivots are stored in arrays for later use.
Channel Creation:
For each pivot, the script calculates a support/resistance channel, ensuring it meets the maximum width and minimum pivot requirements.
Valid channels are stored and sorted by "strength" (number of included pivots).
Visualization:
Channels are plotted on the chart as shaded areas using the configured colors.
If enabled, pivots are marked on the chart with labels.
Breakout Detection:
The script checks if the price has broken a support or resistance level on the current bar.
If a breakout is detected, a signal is generated and optionally marked on the chart.
Strategy:
If the price breaks a resistance level, a buy signal is triggered.
If the price breaks a support level, a sell signal is triggered.
User Configuration:
The script allows customization of several parameters to adapt it to different trading styles and assets:
Pivot Period: Period for detecting pivots.
Source: Source for pivots (High/Low or Close/Open).
Maximum Channel Width %: Maximum channel width as a percentage of the price range.
Minimum Strength: Minimum number of pivots required to form a channel.
Maximum Number of S/R: Maximum number of channels to display.
Loopback Period: Lookback period for detecting pivots.
Colors: Customization of colors for resistance, support, and channel.
Extras: Options to display pivots, breakouts, and moving averages.
Example Use Case:
Chart Analysis:
On a daily chart, the script identifies key support and resistance levels based on pivots from the last 10 candles.
Channels are plotted as shaded areas, providing a clear visualization of key zones.
Breakout Trading:
If the price breaks a resistance level, the script generates a buy signal.
If the price breaks a support level, the script generates a sell signal.
Moving Averages:
If moving averages are enabled, they can be used as additional confirmation for signals.
Conclusion:
This script is a powerful tool for traders looking to identify dynamic support and resistance levels and capitalize on breakouts as trading signals. Its flexibility and customization make it suitable for a variety of assets and timeframes.
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
Want to use this script on a chart?
Join my trading community! 📈
🔹 Discord: discord.gg/7Fwru9gqbS
🔹 YouTube: youtube.com/@TradingBauhaus
🔹 Instagram: instagram.com/tradingbauhaus/
See you inside! 🚀
🔹 Discord: discord.gg/7Fwru9gqbS
🔹 YouTube: youtube.com/@TradingBauhaus
🔹 Instagram: instagram.com/tradingbauhaus/
See you inside! 🚀
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.