Horizontal S&R lines

Hi Everyone,

A while back Christof Risch (iya) was kind enough to code the attached indicator for me. The idea behind it was to draw horizontal S&R lines where the O,H,L,C of different price bars were within 0 to 2 pips of each other. However I have noticed the following 2 problems with it:

(i) When it compares OHLC of different bars it is including the OHLC of the same bar. So for example if it finds the close & high of a bar to be the same it is counting it as a hit when it should be comparing the OHLC of DIFFERENT bars.

(ii) It is comparing the OHLC of price bars at each price level rather then comparing them to EACH OTHER. Because of this you can have two price hits that are further apart then what you specified for the pip tolerance.

I use S&R (visual inspection using the above method) together with James16 PA and it can be a real time saver if I can automatically get the S&R lines drawn. I find this a very effective combination for me.

Unfortunately IYA doesn’t seem to visit this forum anymore so I would be REALLY grateful if someone is kind enough to fix these problems.

Thanks for any help.
Naj

has anyone found an s/r tool that actually draws s/r? lol has anyone responded to this? interesting that someone wants to help to make an/ sr tool rather than some silly repaiting indicator and nobody even responds to the request... how crazy

sorry naj i dont code but if i did i would try to help u out ...but i dont lol

Dagoods, it's possibly not so crazy; translating a "visual abstract" like S/R into programmable rules is not necessarily a trivial task.

It so happens that it's one of several projects that I'm currently working on. I will post the resulting indicator if/when I finally get around to completing it.

David

In my opinion, open and close prices should have nothing to do with S&R. When finding S&R, you should only be concerned with highs and lows. Isn't it quite likely that price bounces off an S&R level? A bar might open quite far from an S&R level, then move down to it, but quickly bounce off of it and finally close far away from the S&R level. In that case, there will be a long shadow/wick of the bar, the open and close would be far away from the S&R level. Afterall, that's what support is (when price repeatedly bounces up off a floor) and what resistance is (when price repeatedly bounces down off a ceiling).

So by eliminating the O and C aspects from the algorithms, it would greatly simplify the programming. However, hanover is right, sometimes what seems like such a simple thing for us to spot with our eyes, is actually quite challenging to write down in an algorithm that a computer could understand.

Nevertheless, here is my stab at it in pseudo code: You could basically look at each bar and count the number of other bars that have a high or low very close to the current bar's high or low. when a bar has a high count (exactly how many could be specified by the user with a parameter), it's high/low could be considered a S&R level.


Then you would do the same with the lows, L[i]. Keep looping through all the bars like this (loop through the index, i). Of course you could set the "2 pips" and "20 bars" to whatever threshold you want.


BUT! Even better might be to loop through different price ranges and count the number of highs/lows that lie in that region...


I guess you could just check individual prices rather than a price range. In the end, the prices (or price ranges) with the highes counts will be the strongest S&R levels. Draw lines through those price levels.