MinMax Indicator
period = 20 (5–200) • show_bands = true Overview
The MinMax indicator provides a fundamental yet powerful approach to identifying support and resistance levels by continuously tracking the highest high and lowest low over a specified lookback period. These dynamic levels represent price extremes where market participants have previously shown strong conviction, either through buying at lows or selling at highs. Unlike static horizontal support and resistance lines drawn manually, MinMax levels automatically adjust as new price data emerges, ensuring traders always have current reference points for potential reversals or breakouts. The indicator's simplicity belies its effectiveness - historical extremes often become future turning points as traders remember and react to these significant levels.
The power of MinMax extends beyond simple level identification. When multiple timeframe MinMax levels converge, they create confluence zones with heightened significance. For instance, if the 20-period, 50-period, and 100-period maximums all cluster around the same price level, that area becomes a formidable resistance zone. The indicator can be enhanced with bands that show the min/max range as a channel, helping visualize price containment and potential breakout scenarios. During trending markets, price typically respects one side of the MinMax channel while repeatedly testing the other, providing clear directional bias. In ranging markets, the MinMax levels act as boundaries, with price oscillating between the extremes.
Interpretation & Trading Signals
Support & Resistance Levels:
- Maximum Line: Dynamic resistance, selling pressure zone
- Minimum Line: Dynamic support, buying interest area
- Channel Width: Volatility measure, wide = high volatility
- Price Position: Above/below midpoint shows bias
Trading Strategies:
- Range Trading: Buy at minimum, sell at maximum in sideways markets
- Breakout Trading: Enter when price breaks min/max levels decisively
- Trend Following: Use min as trailing stop in uptrends
- Mean Reversion: Fade moves to extremes, target midpoint
Multi-Timeframe Analysis:
- Confluence Zones: Multiple timeframe extremes align
- Breakout Confirmation: Price exceeds longer-term min/max
- Risk Management: Use higher timeframe levels for stops
- Trend Strength: Compare short vs long period channels
Example Usage
Code examples will be available once the Rust implementation is complete.