Operation

While S/R Analyst Pro offers a lot of flexibility in terms of configurable parameters, it was designed first and foremost to be intuitive and easy to use.

To load the S/R Analyst Pro script you must first start the eSignal application and open an Advanced Chart.

•	Type in the symbol and bar interval that you wish to chart;

•	Right-click anywhere in the chart and select the Formulas option from the pop-up menu;

•	Select the SRAnalyst directory from the list of available formula directories and click on it. (Note: If you installed the S/R Analyst Pro script into a different directory, simply click on that directory instead);

•	Finally, click on the SRAnalystPro.efs file that you will see in the menu and the script will be loaded into your chart.

When you first load the script, it is likely that you will see several pivot point markers (the blue and red arrow symbols) and, depending upon the current price action, you may also see some Upper and Lower trendlines drawn on the chart as well as S/R lines and/or Gap lines. Refer to the Screen Layout page for a description of the various on-screen components.

While all of the individual parameter settings are explained in detail in the S/R Analyst Parameters section, in this section we will go over some of the more important parameters and how they impact the operation of the S/R Analyst Pro script. To access the script parameter menu, click on the S/R Analyst Pro icon that you see at the bottom-left of your chart.

Tolerance: This is the most important calculation in the S/R Analyst Pro script because it governs the trendline and S/R line calculations. Tolerance is defined as the percentage of price that constitutes a Break or a Touch of a trendline and is used to determine whether or not a trendline is valid. It is also used in a similar fashion to determine support/resistance zones (e.g., S/R lines). By way of example, a Tolerance value of 0 would mean that there is no leeway in determining Breaks and/or Touchpoints. Assume that we have a trendline drawn from point A to point B. If price pushes past this trendline (by even the tiniest amount) at any point between A and B, the trendline would be considered broken and, therefore, invalidated. By the same token, if price actually touches this trendline at any point between A and B (but does not push past the trendline), we would consider that to be a Touchpoint.

In the S/R Analyst Pro script, Tolerance is calculated using the Average True Range (ATR) of the security you are charting. There are two parameters that determine the Tolerance value: Tolerance ATR Length and Tolerance Multiple. Basically, the Tolerance Multiple is applied to the current ATR value and the resulting value is converted to a percentage. This percentage is then used as the Tolerance value.

In practice you will find that a Tolerance value of 0 (which is achieved by setting the Tolerance Multiple parameter to 0) is probably too strict. The script will often generate more useful trendlines when you give it a little leeway in terms of the Tolerance value. The default Tolerance Multiple is 0.10 (e.g., 10% of the current ATR value) which should be adequate for most, if not all, of the securities that you are likely to chart. Adjust the Tolerance Multiple up to increase the Tolerance value and adjust the Tolerance Multiple down to decrease the Tolerance value.

Pivot Size: The S/R Analyst Pro script uses price pivots as the basis for calculating trendlines as well as determining support/resistance zones. The term 'pivot', as used in the context of this script, refers to a bar with a high or a low price that supercedes all of the bars in the general vicinity. We can measure the 'strength' of a pivot by counting the number of bars on either side that have lower highs (when looking at a high pivot) or higher lows (when looking at a low pivot). A high pivot with a strength of 5 (e.g., 5 lower highs to the left of it and 5 lower highs to the right of it) would be considered stronger than a high pivot with a strength of only 3.

A default setting of 3 is used for Pivot Size and this will probably be more than adequate in most situations. Just keep in mind that you can change this setting if you need to.

Lookback Bars: The Lookback is simply the number of bars on your chart that S/R Analyst Pro will use in performing its trendline, S/R line, and Gap line calculations. The default value is 150 bars but, depending upon the security and bar interval you are using, you may want to increase this number so that you can find older support/resistance zones as well as longer trendlines, if they exist.

Show S/R Lines: S/R lines are defined as a confluence of pivot points and they represent price levels where a number of price pivots were formed in the historical data. Since a pivot is essentially a price level where price was turned around, it would be safe to assume that a particular price level that is in close proximity to multiple pivot points would be a potentially strong area of support/resistance. S/R lines are ranked in S/R Analyst Pro by strength, and strength is simply a measure of how many pivot points 'met' at that particular price level. You can use this internal ranking to filter the display of S/R lines on your chart. See the Show S/R Lines, S/R Strength S/R Formatting and SR/Gap Proximity parameters for more information.

Show Gap Lines: Gap lines are defined as price levels (price ranges actually) where price either gapped up or gapped down. A Gap Up is where the Low of a price bar is higher than the High of the price bar that precedes it. A Gap Down is where the High of a price bar is lower than the Low of the bar that precedes it. Gaps can be very strong areas of support/resistance and this feature makes it very easy to spot them. See the Show Gap Lines, Gap Line Thickness and SR/Gap Proximity parameters for more information.

The parameters listed above are those that you will probably use the most on a day-to-day basis. Remember, however, that there are many other parameters available that can be used to tweak and fine-tune the operation of the script. Be sure to review all of the available parameters in the S/R Analyst Parameters section.