Strong Historical Levels - MetaTrader 5 Script | Trading Script Download - MT4/MT5 Resources

Historical levels are the prices during the lifetime of a symbol that are technically considered the most repeated. From a financial perspective, these prices are important constraints on the economic conditions of the financial environment, and their shadow is on the dedicated symbol chart. There is scientific material that shows that these levels are related to financial limits/stages and that prices/interest rates cannot easily exceed these levels unless there is a change in the financial stage of the instrument under consideration. These are all powerful reasons why traders must use historical levels for market analysis.

I tried to create a structural view of these levels from a candle formation analysis perspective. Price/rate behavior at these levels is likely to have a strong impact on the candle shape. For example, if price levels are high, we should see price increases because there is a lot of money sleeping at or around that price/rate.

With this concept in mind, two rules were developed:

To make the rules clearer, two pictures have been prepared.

Figure 1: Jumping from the S/R level with the same action (like a bullish candle on support)

Figure 2: Jumping from the S/R level, but in the opposite direction (like a bullish candle below resistance)

Based on these rules (the rules are optional) an indicator is developed that collects data in two different matrices (sup_mat and res_mat). During data collection, the number of S/R levels that comply with the selected rule is displayed on the screen. Hensey, the algorithm library ( data analysis.mqh ) library is used to cluster the collected data using the K-means method . The results are displayed in the form of support and resistance data columns.

After enhancing the levels, it opens a chart with the same symbols analyzed and then plots all the levels (clusters) on that chart based on the clustering process. Some parameters of the indicator can be changed from the screen to make it more user-friendly. This is a brief description of the tool and a screen graphic of its results.

Figure 3: Indicator screen

Figure 4: Automatically plot Levels results on the chart

The conclusion is that the instrument is very powerful and the levels show strong support and resistance behavior, even if we have to adhere to very basic rules. It is possible to add more rules, and the code is in simple mode to make more rules to enhance it. Adding additional rules, dividing clustering regions and doing more specialized clustering for these regions, the maximum distance taken before searching for modification levels could be further improvements of the tool. Friends who want more can contact me.

Attachment download

📎 strong_levels_v1.mq5 (19.86 KB)

📎 dataanalysis.mqh

Source: MQL5 #48191