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Support And Resistance | EcoX Trading
Purpose
This indicator identifies key support and resistance levels and visualizes them alongside Bollinger Bands. It is designed specifically for the 1-minute timeframe, targeting liquidity zones through higher timeframe levels. The indicator assists traders in spotting potential reversal zones and overbought/oversold conditions. While it highlights important price levels, it is not intended for precise entry or exit signals and works best when combined with other tools like RSI, SMI, AI Trend or indicator of your choice.
Calculation Overview
Support and Resistance Levels:
Derived from ta.lowest() and ta.highest() functions for specific intervals:
15 minutes, 1 hour, 2 hours, 4 hours, 12 hours, and 1 day.
These intervals are carefully selected to capture liquidity zones respected by price action.
Bollinger Bands:
Uses a 200-period volume-weighted moving average (VWMA) as the basis.
The bands are calculated with a 3x standard deviation, marking extreme price levels.
Usage / Example Scenario
1. Long Positions
Identify a Strong Support Level:
Locate a support level (e.g., 2-hour support in green) that the price consistently bounces off without breaking lower.
Confirm Liquidity:
Check the order book and market depth chart to confirm the presence of substantial limit buy orders just below the support.
Strong liquidity reinforces the potential for a reversal at the support level.
Entry Strategy:
Open a long position when the price approaches the support level and shows signs of reversal (e.g., respecting the support without further downward momentum).
Exit Strategy:
Exit the position near a resistance level (e.g., 4-hour resistance in yellow) where the price has historically struggled to break higher.
2. Short Positions
Identify a Strong Resistance Level:
Find a resistance level (e.g., 1-hour resistance in orange) where the price frequently gets rejected.
Confirm Liquidity:
Use the order book and market depth chart to verify significant limit sell orders above the resistance.
Strong sell-side liquidity indicates a high probability of a reversal at this level.
Entry Strategy:
Open a short position when the price approaches the resistance level and shows signs of reversal (e.g., failing to move higher and respecting the resistance zone).
Exit Strategy:
Close the position near a support level (e.g., 2-hour support in green) where buying pressure is likely to occur.
Disclaimer
This indicator is a technical tool for identifying price zones of interest. It does not guarantee accurate entry or exit points. Always use it as part of a broader trading strategy.
This indicator identifies key support and resistance levels and visualizes them alongside Bollinger Bands. It is designed specifically for the 1-minute timeframe, targeting liquidity zones through higher timeframe levels. The indicator assists traders in spotting potential reversal zones and overbought/oversold conditions. While it highlights important price levels, it is not intended for precise entry or exit signals and works best when combined with other tools like RSI, SMI, AI Trend or indicator of your choice.
Calculation Overview
Support and Resistance Levels:
Derived from ta.lowest() and ta.highest() functions for specific intervals:
15 minutes, 1 hour, 2 hours, 4 hours, 12 hours, and 1 day.
These intervals are carefully selected to capture liquidity zones respected by price action.
Bollinger Bands:
Uses a 200-period volume-weighted moving average (VWMA) as the basis.
The bands are calculated with a 3x standard deviation, marking extreme price levels.
Usage / Example Scenario
1. Long Positions
Identify a Strong Support Level:
Locate a support level (e.g., 2-hour support in green) that the price consistently bounces off without breaking lower.
Confirm Liquidity:
Check the order book and market depth chart to confirm the presence of substantial limit buy orders just below the support.
Strong liquidity reinforces the potential for a reversal at the support level.
Entry Strategy:
Open a long position when the price approaches the support level and shows signs of reversal (e.g., respecting the support without further downward momentum).
Exit Strategy:
Exit the position near a resistance level (e.g., 4-hour resistance in yellow) where the price has historically struggled to break higher.
2. Short Positions
Identify a Strong Resistance Level:
Find a resistance level (e.g., 1-hour resistance in orange) where the price frequently gets rejected.
Confirm Liquidity:
Use the order book and market depth chart to verify significant limit sell orders above the resistance.
Strong sell-side liquidity indicates a high probability of a reversal at this level.
Entry Strategy:
Open a short position when the price approaches the resistance level and shows signs of reversal (e.g., failing to move higher and respecting the resistance zone).
Exit Strategy:
Close the position near a support level (e.g., 2-hour support in green) where buying pressure is likely to occur.
Disclaimer
This indicator is a technical tool for identifying price zones of interest. It does not guarantee accurate entry or exit points. Always use it as part of a broader trading strategy.
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