Behavioral Transform Model: Conditional Support & Resistance

Overview

Spot abnormal price moves based on recent market behavior.
This indicator models how traders perceive “normal” price action, using recent return patterns to draw adaptive support and resistance levels. It builds a dynamic corridor around a conditional expected value, shading an envelope that the majority of price closes historically. Price closes outside this corridor are marked with color-coded anomaly signals, highlighting significant shifts in market behavior.
In short, the tool does three things: it distinguishes normal vs. abnormal price behaviour, draws data-driven support and resistance zones, and helps you see excess volatility as it develops.


What You See (Conditional Upon the Lookback Period)

Expected Value (gray line): Rolling average serving as the center point.
Upper & Lower Bounds (±1 standard deviation): Define the core “normal” price range. The upper bound is displayed in blue, and the lower bound in orange. Secondary bounds use darker shades of blue and orange to distinguish them. You can see the edges of these bounds on the chart and adjust shading if preferred. The latest values for all bounds are also shown on the price axis for easy reference.
Secondary Bounds: Wider outer limits set by the Secondary Standard Deviation input.
Shaded Corridors: Visually framing the range between core and secondary bounds for quick context.
Anomaly Markers:
White: Close outside normal corridor
Blue: Close above secondary upper bound
Orange: Close below secondary lower bound
Markers highlight behavior shifts but do not provide triggers or advice.

How It Works

The model captures trader behavior by framing price relative to a local mean and volatility derived from recent returns. The shaded corridor represents a statistically grounded “normality” band that adapts as market conditions change. Price moves beyond this band signal behaviorally and statistically significant events, such as sentiment shifts or volatility spikes.

Inputs

Lookback Period: Defines horizon for recent history, mimicking trader memory. Shorter values react quickly; longer values smooth noise.
Secondary Standard Deviation: Adjusts the width of the outer bounds and filters the frequency of anomaly markers. Regular anomaly markers still appear normally and are mainly influenced by the lookback period, while extreme anomaly markers depend on both the lookback and the secondary standard deviation width setting.

How to Use

Add to standard candlestick charts with adequate history.
Follow price relation to the shaded corridor to gauge normality.
Use anomaly markers to spot meaningful deviations from recent behavior.
Adjust inputs to match personal trading style and timeframe: longer chart timeframes often pair better with shorter lookback windows, allowing the model to remain focused on the most recent and relevant return structure.

Notes

Valid for most symbols and timeframes with sufficient data.
Restricted to standard chart types.
Latest support/resistance levels displayed on price scale.

Limitations & Risks

Outputs depend on lookback setting; different settings emphasize different dynamics.
This tool is descriptive only—no predictive signals or trade instructions are provided.
Combine with other analysis methods and apply risk management.
Past behavior does not guarantee future results.