(On TradingView, please ensure you select the version of Voodoo Support and Resistance labeled [OFFICIAL RELEASE])
The main purpose of the Voodoo Support and Resistance indicator is to dynamically plot horizontal trendlines based on where the biggest interest in price is. You can consider this as being where supply and demand find equilibrium–creating a high probability area for a pivot point in the market. Such places are called support/resistance lines depending on which direction price approaches them from. To plot horizontal support/resistance lines Voodoo requires the asset data feed to include volume information.*
In addition Voodoo Support and Resistance provides a set of moving averages for use with trending strategies, hints for early entry and risk management levels, color based trend guidance, timezones (very useful for trading traditional markets), and reversal candles hints (currently in beta testing).
Detailed how-to guides on usage, timing, and planning entries will be available in the Voodoo Trading Strategies section of this course.
* Some exchanges do not supply a volume feed, and some instruments such as the US Dollar Currency Index (DXY) do not offer volume information as they are not traded directly but rather as derivatives.
Full size: https://www.tradingview.com/x/OmuqAoj9/
Main trading range – dictating general price structure
Local trading range – indicating current trading cluster
Fibonacci trendlines – Fibonacci based trendlines dividing main trading range into tradeable support and resistance lines
Fibonacci extensions of main trading range – for price trending out of main range it gives potential take profit levels by extending the range by selected Fibonacci ratio
MA 1 – fastest moving average for trending strategy entries. In addition this moving average provides color based information on current short term trend:
MA 2 – slower moving average for trending strategy risk management
MA 3 and MA 4 – main trend change and support/resistance zone
Magic 3H 377 EMA – typically strong support and resistance for all timeframes, used mostly for confluence with other indicators and take profit targets
Entry dots – early entry for moving average trending strategy
Stop Loss (SL) dots – safe SL levels providing at least 1:2 RR setups at entry point
Hints of potential short term trend reversals based on candle setups and patterns.
*Early beta, currently in testing–improvements and more patterns to be added.
Indicating main trading sessions. This is a very important tool for trading traditional and OTC markets like forex. Knowing when money comes in and out of the market during the trading-day is crucial, because liquidity and volatility is the bread and butter for a consistently profitable trader.
Due to TradingView limitations, this indicator is based on the exchange time zone. In the near future we will add a time offset option to fine tune to the time zone of the exchange you are trading on. Sessions are visible on all time frames below 4H.
Moving Averages checkbox - toggles visibility of moving averages on the chart
Magic 3H 377 EMA checkbox - toggles visibility of 3H 377 EMA
MA source - OHLC source for moving averages calculation. The default setting is to use the candle open price
MA Length - number of periods back used in calculating the moving average
MA Type - type of moving average, either simple moving average (SMA), or a more reactive exponential moving average (EMA)
Fibonacci Extension ratio - which Fibonacci extension Voodoo uses to plot support/resistance levels beyond the main trading range. The default setting is the 0.382 extensions as backtesting showed this to be the best
Entry/Sl levels checkbox - toggles dots hinting optimal early entry and stop-loss (SL) levels for moving average trending strategy
Entry/SL offset [pips] - number of pips which will be added to entry/SL levels. ( 1pip is the second-to-last number in price, e.g. if price is of the format 0.00, 1pip will be 0.10, if of the format 0000, 1pip will be 10 price units)
Reversal Candles checkbox - toggles reversal candle pattern hints
Sessions chceckbox - toggles sessions visibility on the chart