Support Resistance Finder

Look for prices where price reversed multiple times. Draw a horizontal line through these swing points. If multiple swings cluster near a price, draw a zone. More touches = more valid level. Start with obvious levels that stand out.

Minimum 2 touches to identify a potential level. 3+ touches confirm it's significant. More touches generally mean stronger level. But also consider timeframe - 2 touches on daily chart may be more significant than 5 on 5-minute chart.

Both methods work. Using closes focuses on where price 'agreed' to end. Using wicks captures full rejection. Many traders draw zones that encompass both. Be consistent with whichever method you choose.

You can't know for certain - that's why we use stops. Stronger levels (more touches, higher timeframe, confluence) are more likely to hold. Volume on the approach matters. Ultimately, you trade probabilities and manage risk.

Yes, S/R appears on all timeframes from 1-minute to monthly. However, higher timeframe levels are generally more significant. A daily support level is more important than a 5-minute level. Match your trading timeframe to appropriate S/R.

Priority order: 1) Higher timeframe levels, 2) More touches, 3) More recent tests, 4) Confluence with other factors, 5) Volume confirmation. Focus on the 2-3 most important levels near current price rather than cluttering chart with many levels.

Zone width should reflect the security's volatility. Use ATR: zone = level ± (0.5 to 1.0 × ATR). Alternatively, use a percentage (0.5-1% of price). More volatile stocks need wider zones. The zone should contain the swing point cluster.

Moving averages act as dynamic S/R. In uptrends, price often bounces off rising MAs (support). In downtrends, price often rejects declining MAs (resistance). Key MAs: 20, 50, 200 periods. When MA aligns with horizontal S/R = stronger level.

Support is where buyers stepped in historically. Demand zone is similar but often implies a specific area where institutions accumulated (Order Block concept). Practically, both are areas of buying interest. Demand zones focus more on institutional activity.

Ranging: Classic bounce trading - buy support, sell resistance. Trending: Trade with trend - in uptrend, buy support bounces (skip shorting resistance); in downtrend, short resistance (skip buying support). Trend alignment improves success rate.

Steps: 1) Detect swing points (fractal algorithm), 2) Cluster nearby swings (within tolerance), 3) Score clusters (touches, timeframe, volume, recency), 4) Rank by score, 5) Output zones with metadata. Use Python with pandas for data processing.

Map both: horizontal S/R from swing points AND volume profile (POC, VAH, VAL, HVNs). Where they align = highest probability levels. Horizontal S/R at HVN = very strong. Horizontal S/R at LVN = weaker; may break easily.

Example: Score = (Touches × 2) + (TF_multiplier) + (Recency_bonus) + (Volume_bonus). TF_multiplier: daily=3, 4H=2, 1H=1. Recency: <1mo=2, <3mo=1, older=0. Volume: above avg=2, avg=1, below=0. Test and calibrate to your market.

Multiple tests can strengthen or weaken a level. Early tests that hold strongly = level is valid. Repeated tests with smaller bounces = level weakening (buyers/sellers exhausting). Eventually, weakened levels break. Track bounce magnitude on each test.

At S/R, look for: absorption (high volume, little movement), delta divergence (buying delta at support), iceberg orders (repeated buying at level). These show institutional defense of level. Lack of order flow response suggests level may break.