OPEN-SOURCE SCRIPT
Floor and Roof Indicator
The Floor and Roof indicator is a tool developed to help traders identify potential areas of support and resistance both for trend following and for mean reversal trading decisions.
The indicator plots the "Roof" which is the main level of resistance, and the "Floor" which is the main level of support. These lines are calculated on the "Lenght" parameter and smoothed by the "Smooth" parameter, and they use both the volatility and the main market structure as calculation methods.
Additionally, this indicator plots an area that can be modified by the "Zone width" parameter and two other lines, called "Second floor" and "Second roof" respectively, which are plotted only whenever they are significant to the price current level.
This indicator can be used in several ways:
- In a clear trend, you could wait for a break of the second floor or roof as an indication of a change in the market direction
- As the price goes out of the reversal zones, this can be an indication of a reversal
- In a clear trend, you can wait for the price to bounce on the second floor or roof lines to enter a trade
The indicator plots the "Roof" which is the main level of resistance, and the "Floor" which is the main level of support. These lines are calculated on the "Lenght" parameter and smoothed by the "Smooth" parameter, and they use both the volatility and the main market structure as calculation methods.
Additionally, this indicator plots an area that can be modified by the "Zone width" parameter and two other lines, called "Second floor" and "Second roof" respectively, which are plotted only whenever they are significant to the price current level.
This indicator can be used in several ways:
- In a clear trend, you could wait for a break of the second floor or roof as an indication of a change in the market direction
- As the price goes out of the reversal zones, this can be an indication of a reversal
- In a clear trend, you can wait for the price to bounce on the second floor or roof lines to enter a trade
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.