Psychological Support/Resistence [BigBeluga]

10 Sep 2023

The Psychological Support/Resistance indicator aims to provide the user with hypothetical support and resistance zones that are likely to provoke a strong reaction in price, either in both directions, providing good bouncing zones or significant movements once those levels are breached.

🔶 CALCULATION
The script takes into consideration the total number of sequential candles moving in the same direction, as determined by the user's settings. When this sequence is identified, a level is created.

A level is considered broken when the candle's close is above the top/bottom of the level.


Users have the option to select the width of the area based on the Average (AVG), Open, or Close.




AVG will provide the average width of the level of the area.
Close will offer a broader range to work with.
Open will provide a very narrow area.

🔶 METHODOLOGY
The idea behind these areas is that the price will be more likely to produce either a substantial move in the ongoing direction or, when breached, a strong price reaction.

The more the support level is touched or tested, the more likely it is to break.
The longer it has been since its creation and the less it has been tested, the more likely it is to offer strong support or resistance.
Wicks starting to close above the level will indicate a potential breakout to the upside or downside if a candle manages to close above it.



🔶 INPUTS
Users have the option to determine the number of sequential candles.
Users also have the option to decide how many zones to display on the chart.
Color changes are possible.
The possibility to show volume on the creation of the zone is included."