Profit target area — Indicator by ondra.novacisko.cz

Update.
- you can specify count of bars used to detect reversal pattern
- you can specify count of bars used to determine lowest or highest price to place support or resistance
- area between lines is filled by green - ascending, red - descending trend

To trade:
- open position using stop command on S/R
- close position using limit command on retracement line
- close position when background colour indicates trend change

(erratum: last balloon on right should say "buy limit")

Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

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.

Want to use this script on a chart?

study("Profit target area", overlay=true)
bars =input(title="Reversial pattern length (bars)", type=integer, defval=3, minval=1)
exbars = input(title="S/R detection (bars)", type=integer, defval=10, minval=1)
descent_cnt = high <= nz(high[1])?nz(descent_cnt[1])+1:0
ascent_cnt = low >= nz(low[1])?nz(ascent_cnt[1])+1:0
descent = descent_cnt >= bars
ascent = ascent_cnt >= bars
st = ascent?true:(descent?false:nz(st[1]))

h = st[1] and not st?highest(high,exbars):nz(h[1])
l = not st[1] and st?lowest(low,exbars):nz(l[1])
f = h - l
h38 = l + f/(1-0.382)
h62 = l + f/(1-0.618)
l38 = h - f/(1-0.382)
l62 = h - f/(1-0.618)

modeline = plot(st[0]?l:h,color=white,title="invisible plot", style=cross)
ph = plot(h,color=green, title="resistance")
pl = plot(l,color=red, title="support")
p3 = plot(h38, color=#80FF80, title="38% above")
p1 = plot(h62, color=#C0FFC0, title="62% above")
p2 = plot(l62, color=#FFC0FF, title="62% below")
p4 = plot(l38, color=#FF80FF,  title="38% below")
fill(p1,p3,color=#80FF80, transp=80,  title="62% above")
fill(p3,ph,color=#00FF00, transp=80,  title="38% above")
fill(p2,p4,color=#FF80FF, transp=80,  title="62% below")
fill(p4,pl,color=#FF00FF, transp=80,  title="38% below")
fill(ph,modeline,color=green, transp=90, title="going up")
fill(pl,modeline,color=red, transp=90, title="going down")

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