This indicator aims to identify key support and resistance levels in the market and draw support and resistance clouds on the chart to represent the areas between these points. The indicator combines statistical analysis and graphical display to assist traders in determining trend reversal points and breakouts. It is a commonly used auxiliary analysis tool.
The core logic of this indicator is to statistically calculate the highest and lowest prices over a certain period of time to identify potential support and resistance levels. The calculation formulas are as follows:
The above four lines constitute the key points of the support/resistance cloud of this indicator. The indicator uses filled colors to fill cloud shapes between the 0.382 line and the 0.618 line, visually displaying the fluctuation range and key price levels.
When the closing price is above the 0.618 line, the bar color is white, and conversely when it is below the 0.382 line, the bar color is black, which belongs to sell and buy signals. The support/resistance cloud displayed by this indicator can be seen as the range of potential support/resistance levels. Prices breaking through these upper and lower boundaries usually mean a trend reversal.
This support/resistance cloud indicator has the following outstanding advantages:
It should be noted that this indicator also has some inherent deficiencies and risks:
This indicator can be further optimized in the following aspects:
This support/resistance cloud indicator integrates statistical analysis and graphical display functions. It can effectively assist in determining key support/resistance levels and breakouts. However, it cannot rely solely on itself. It needs to be combined with other multiple indicators to maximize its usefulness. It can be upgraded from adaptive parameter settings, multi-indicator filtering combinations and other dimensions to improve practicality.
/*backtest start: 2024-01-10 00:00:00 end: 2024-01-17 00:00:00 period: 15m basePeriod: 5m exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}] */ //@version=3 strategy("[IND] rang3r", overlay=true) entP = input(50, "Entry Period: ") exP = input(25, "Exit period: ") sensitivity = input(0.9999, "Sensitivity") periodHigh = 0.0 periodLow = 0.0 epH = 0.0 epL = 0.0 //Entry Trades for i = 1 to (entP+1) if i == 1 periodHigh:=high[i] else if periodHigh < high[i] periodHigh:=high[i] for i = 1 to (entP+1) if i == 1 periodLow:=low[i] else if periodLow > low[i] periodLow:=low[i] s = high[1] > periodHigh*sensitivity and open > close //and (close[1] > open[1] ? open[1] : close[1]) > close l = low[1] < periodLow*(1/sensitivity) and close > open //and (close[1] > open[1] ? close[1] : open[1]) < close strategy.entry("long", strategy.long, when=s) strategy.entry("short", strategy.short, when=l) bgcolor(l ? green : na) bgcolor(s ? red : na) periodCenter = (periodHigh+periodLow)/2 period0618 = (periodLow)+(periodHigh-periodLow)*0.618 period0382 = (periodLow)+(periodHigh-periodLow)*0.382 cloud1 = plot(period0382, color=#494949) cloud2 = plot(period0618, color=#494949) fill(cloud1, cloud2, color=#d8d8d8) plot(periodHigh, color=#d81751) plot(periodLow, color=#0daa20) //plot(periodCenter, color=#494949) bc = close > period0618 ? white : (close < period0382 ? black : na) barcolor(bc)template: strategy.tpl:40:21: executing "strategy.tpl" at <.api.GetStrategyListByName>: wrong number of args for GetStrategyListByName: want 7 got 6