Ranking Support and Resistance Zones by Strength, Confluence, and Mitigation
Summary
This indicator turns confirmed swing highs and lows into support or resistance zones, then ranks the zones to reduce chart clutter. Pivots must clear a minimum displacement relative to ATR; each accepted pivot becomes a band whose width is also tied to ATR. The score combines zone size, pivot-bar volume, alignment with a trend average, swing prominence, respected revisits, and age. Overlapping zones on the same side are absorbed into a wider zone, and zones judged broken are removed from the active display.
The indicator also tracks how deeply price has traded into a zone, using mitigation to lower its score and alter its label and strength display. It shows only the highest-ranked surviving zones, with configuration options for pivot confirmation, merging, zone width, age, and display limits. These are heuristic ranking choices, not evidence that a level will hold or that trading from it is profitable. The document describes the indicator’s design and uses but supplies no backtest or validation results.
Key ideas
- Confirmed pivots are filtered by displacement relative to ATR before becoming zones.
- Zone rankings combine swing quality, size, volume, trend alignment, touches, and age.
- Overlapping same-side zones are merged to represent clusters of nearby pivots.
- Price penetration reduces a zone’s score, while sufficiently decisive closes beyond it remove it.
- The indicator ranks levels for attention but provides no evidence of trading performance.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.