Volume-Profile Guided Support and Resistance from Price Pivots
Summary
This indicator combines a rolling volume profile with confirmed price pivots to create dynamic support and resistance levels. It bins recent trading activity into price rows, identifies nearby high-volume nodes, and may shift a raw swing pivot toward a stronger node when profile evidence supports the adjustment. Candidate levels are scored using factors including relative pivot volume, wick rejection, and an absorption proxy. ATR-based search, merging, invalidation, and level-count rules manage the resulting levels.
The chart can show the profile, point of control, pivot markers, level scores, and active support or resistance. The script reconstructs historical profiles when evaluating older pivots to use information available at the time, though pivots are confirmed only after later bars. Buy and sell volume are estimated from each candle’s close location within its range, rather than derived from bid/ask trades. The document describes an indicator and its configurable heuristics but supplies no evidence of predictive performance; its node estimates and scores should therefore be treated as approximate analytical aids.
Key ideas
- The rolling profile distributes each bar’s volume across price rows based on range overlap.
- Confirmed swing pivots are evaluated against nearby profile nodes and may be relocated toward stronger volume structure.
- Level scoring combines profile evidence with pivot volume, wick rejection, and an absorption proxy.
- ATR distances govern node searches, duplicate merging, and level invalidation.
- Buy and sell volume attribution is estimated from candle close location rather than true bid/ask data.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.