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Support Resistance Solver


The Support Resistance solver evaluates the proximity of price to a support/resistance line. Headwind mode produces a Long output value when price is below resistance and the ideal distance away.  A Short output value is produced when price is above support and the ideal distance away.  Tailwind mode produces a Long output value when price is above support and within the ideal distance.  A Short output value is produced when price is below resistance and the ideal distance away.

Parameters

This section is common to all solvers.  A description can be found here.
This section is common to all solvers.  A description can be found here.

Options

Selects the solver’s operation mode.

Headwind
Examines support and resistance in the context of a force working against your trade direction. IE: if you are considering a Long trade, and there is a s/r line above the current price, that s/r line will provide resistance(or a headwind) against your trade.

Tailwind
Examines support and resistance in the context of a force working for your trade direction. IE: if you are evaluating the Long side and there is a s/r line below the current price, that s/r line will likely cause price to bounce off to the long side.

When True, this will filter the Tailwind mode output using the indicator SiSwings’ SwingDirection output.  Long outputs will only occur when the SiSwings indicator is in a up trend.  Short outputs will only occur when the SiSwings indicator is in a down trend.

When set to True, uses the Regression Channel lines to evaluate as support or resistance.  In Headwind mode, the Upper channel line is resistance, and a Long output is produced when price is the Ideal Distance away.  In Tailwind mode, the Lower channel line is support, and a Long output is produced when price is within the Ideal Distance.

When set to True, indicator plots are used as support and resistance values.  This solver can use multiple plots from an indicator simultaneously, such as the Pivots indicator which has seven plots.  The Type parameter should not be changed from ‘Indicator Value’.  For a detailed explanation, see the section on Data Type Selection.

When set to True, uses equally spaced and fixed imaginary support/resistance lines.

 

Input

Select which price Open, High, Low, or Close, that the solver will compare to the support & resistance lines.

Distance Targets

When the distance between price and the s/r line equals this value, or less, the solver’s output will equal the value of Output → At Min or Less. Applicable to Headwind mode.

Measurement
Sets the type of measurement to calculate the Minimum Distance.  Possible measurements are PointsTicksRenko Bricks, & ATRs.

When the distance between price and the s/r line equals this value the solver’s output will equal the value of Output → At Ideal Distance.  Applicable to Headwind & Tailwind modes.

Measurement
Sets the type of measurement to calculate the Ideal  Distance.  Possible measurements are PointsTicksRenko Bricks, & ATRs.

When the distance between price and s/r line is greater than this value the solver’s output will equal the value of Output → At Max or More.   Applicable to Tailwind mode

Measurement
Sets the type of measurement to calculate the Maximum Distance.  Possible measurements are PointsTicksRenko Bricks, & ATRs.

Output

In Headwind mode, this sets the solver’s Long output value when price is below resistance and equal to or greater than Distance → At Ideal Distance.  When price is above support this sets the solver’s Short output.

Tailwind Mode
In Tailwind mode, this sets the solver’s Long output value when price is below resistance and within Distance → At Ideal Distance.  When price is above resistance this sets the solver’s Short output.

Headwind mode only.  Sets the solver’s Long & Short output value when price is equal to or less than Distance Targets → Minimum Distance to support/resistance.

Tailwind mode only.  Sets the solver’s Long & Short output value when price is equal to or greater than Distance Targets → Maximum Distance from support/resistance.

In Headwind Mode
If set to 1, when price is above all support/resistance lines a Long output will occur (allowing for Long signals).  And, when price is below all support/resistance lines a Short output will occur (allowing for Short signals).

If set to 0, no Long output will occur when price breaks above all support/resistance lines, and no Short output will occur when price breaks below all support/resistance lines.

In Tailwind Mode
If set to 1, when price is below all support/resistance lines a Long output will occur (allowing for Long signals).  And, when price is above all support/resistance lines a Short output will occur (allowing for Short signals).

If set to 0, no Long output will occur when price breaks below all support/resistance lines, and no Short output will occur when price breaks above all support/resistance lines.

Video Tutorial

This video is from our weekly Workshop titled Revisiting the Support Resistance solver, on Oct 4th, 2013.
For more benefit please watch in full screen mode, as this video is recorded in HD.


Examples


Example 1A: The Basics of Headwind

This demonstrates the basic function of Support Resistance solver in Headwind mode.  This Solver will be used with a EMA 100, acting as support/resistance, to detect a distance of at least 30 ticks to the support/resistance line.  This could be used to validate there is enough distance to take a trade Long toward resistance or Short toward support.

  • Add the Support Resistance solver
  • Set Must Agree with Swing Trend to False
  • Set Use Indicator to True
  • Set Indicator to EMA 100
  • Set Minimum Distance to 2 Ticks
  • Set Ideal Distance to 30 Ticks
  • Set No Sup/Res to 0

Note in these charts that the Long & Short Threshold in the Signals Properties are set to 0.99.  A signal is given when price is 30 ticks or more away from support or resistance.

Example 1B: The Basics of Tailwind

This demonstrates the basic function of Support Resistance solver in Tailwind mode.  This Solver will be used with a EMA 100, acting as support/resistance, to detect when price is within 2 ticks of support or resistance.  This could be used to detect a potential price bounce off of support or resistance.

  • Add the Support Resistance solver
  • Set Mode to Tailwind
  • Set Must Agree with Swing Trend to False
  • Set Use Indicator to True
  • Set Indicator to EMA 100
  • Set Ideal Distance to 2 Ticks
  • Set Maximum Distance to 10 Ticks
  • Set No Sup/Res to 0

The chart below shows a signal when price is within 2 ticks of the EMA 100.

Example 2A: Pivots and Headwind

This demonstrates the Support Resistance solver using Woodies Pivots in Headwind mode.  When multiple support/resistance lines are used the Solver will generate Long & Short signals at the same time when price is between support and resistance.  This could be used to validate there is enough distance to take a trade Long toward resistance or Short toward support.

  • Add the Support Resistance solver
  • Set Must Agree with Swing Trend to False
  • Set Use Indicator to True
  • Set Indicator to Woodies Pivots
  • Set Minimum Distance to 2 Ticks
  • Set Ideal Distance to 30 Ticks
  • Set No Sup/Res to 0

Three conditions take place in the chart below.  To the left a Long & Short is given indicating there is 30 ticks or more to the next support or resistance.  In the middle, price breaks above the white pivot and give a Long indicating a clearance of 30 ticks or more to the next resistance pivot.  To the right, price drops below the white pivot and the Short indicates there is 30 ticks or more to the lower support pivot.

Example 2B: Pivots and Tailwind

This demonstrates the Support Resistance solver using Woodies Pivots in Tailwind mode.  When multiple support/resistance lines are used the Solver will generate Long signal when price is near support and has enough distance to above resistance.  For a Short signal price has to be near resistance with enough distance to support below.

  • Add the Support Resistance solver
  • Set Mode to Tailwind
  • Set Must Agree with Swing Trend to False
  • Set Use Indicator to True
  • Set Indicator to Woodies Pivots
  • Set Minimum Distance to 2 Ticks
  • Set Ideal Distance to 30 Ticks
  • Set No Sup/Res to 0

As you can see in the chart, Tailwind mode is more suited for detecting possible bounces off support/resistance lines.

Example 2C: Breaking Out

This is an extension of the previous two examples.  This shows the use of Output > No Sup/Res(breakout) when price penetrates the last support or resistance line in both Headwind and Tailwind mode.

  • Add the Support Resistance solver
  • Set Must Agree with Swing Trend to False
  • Set Use Indicator to True
  • Set Indicator to Woodies Pivots
  • Set Minimum Distance to 2 Ticks
  • Set Ideal Distance to 30 Ticks
  • Set At Ideal Distance to 0

Tailwind mode

  • Add the Support Resistance solver
  • Set Mode to Tailwind
  • Set Must Agree with Swing Trend to False
  • Set Use Indicator to True
  • Set Indicator to Woodies Pivots
  • Set Minimum Distance to 2 Ticks
  • Set Ideal Distance to 30 Ticks
  • Set At Ideal Distance to 0