Support and Resistance Backtester [SS]

How it works

The indicator allows traders to input up to five support and resistance levels manually, with a customizable threshold value that extends the range of each level. Users can specify a source (close, high, or low) and set a lookback length to assess historical price behavior around these levels.

The tool then analyzes how often these levels act as support or resistance, tracking the number of touches and calculating the success rate for each level. It provides visual plotting options, including labels for passes and fails, helping traders objectively evaluate their identified support and resistance zones.

Why it may be useful

Traditional technical indicators like RSI or stochastics often fall short for traders who rely primarily on support and resistance levels. This indicator bridges that gap by offering a quantitative approach to analyzing price zones, allowing traders to objectively assess the reliability of their identified levels.

By providing detailed metrics such as touch frequency, success rate as support or resistance, and visual representations of level performance, traders can make more informed decisions about entry and exit points, ultimately improving their trading strategy and risk management.

When to explore it

The indicator is most effective for traders who focus on support and resistance strategies, particularly day traders and swing traders who rely on key price levels for their trading decisions. It works best on timeframes of 1 hour or less, with a recommended lookback of 300 candles, and on daily charts with a 500-candle lookback.

Traders should use this tool when they want to validate their support and resistance levels, understand their historical performance, and gain insights into potential entry and exit points. It is particularly useful for identifying strong support or resistance zones and filtering out less reliable price levels.

Keep exploring