Support, Resistance & Liquidity Pool Zones

vorgesternSupport, Resistance & Liquidity Pool Zones

This indicator automatically detects and plots support and resistance levels based on pivot points and highlights liquidity pool zones, areas where the trading volume exceeds the average over a set number of bars. It is designed to help traders identify key price levels and liquidity traps that can trigger significant market reactions.

Key Features:

1. Support & Resistance Levels: The indicator identifies pivot highs and pivot lows as potential resistance and support levels, respectively.
   You can customize the number of levels shown on the chart, making it easier to focus on the most recent and relevant price levels.
   
2. Liquidity Pool Zones:The script detects liquidity pool zones, which are areas with above-average trading volume. These zones often act as regions of interest where price accumulation or distribution occurs, potentially leading to significant price moves.
   Liquidity zones are shaded to help traders visually identify areas of high interest in the market.
   
3. Customizable Settings: You can adjust the pivot period to fine-tune how the indicator calculates support and resistance.
   Control the number of support/resistance levels displayed on the chart and the period used to detect liquidity pools.
   Customize the colors for support, resistance, and liquidity zones to match your charting preferences.
   
4. Alerts:
   • The script includes built-in alerts for when the price breaks above resistance or falls below support, helping traders catch key breakout opportunities.
     

How It Works:

• The script calculates support and resistance levels using pivot highs and lows based on the user-defined pivot period.
  
• It monitors liquidity pool zones by comparing the current trading volume with the average volume over a customizable period. When the volume exceeds the set threshold, a liquidity pool zone is highlighted, providing insight into where the market may accumulate or distribute.
  
• Alerts are triggered when the price breaks above the first resistance level or falls below the first support level, giving traders immediate notification of key market events.
  

How to Use:

• Tune the Pivot Period: Adjust the pivot period to your preferred time horizon (default: 10 bars).
  
• Set Liquidity Pool Parameters: Customize the number of bars considered for liquidity pool detection and the volume multiplier to detect high-volume zones.
  
• Monitor Breakouts: Use the built-in alerts to catch potential breakout or breakdown opportunities near support and resistance levels.
  

This script is ideal for traders looking for an easy-to-use tool to visualize support and resistance levels and liquidity pools, aiding in decision-making and trade management.