Defended Price Levels (DPLs) — Melvin Dickover Concept

This indicator identifies and draws horizontal “Defended Price Levels” (DPLs) exactly as originally described by Melvin E. Dickover in his trading methodology.

Dickover observed that when extreme relative volume and extreme “freedom of movement” (volume-to-price-movement ratio) occur on the same bar, especially on bars with large gaps or unusually large bodies, the closing price (or previous close) of that bar very often becomes a significant future support/resistance level that the market later “defends.”

This script automates the detection of those exact coincident spikes using two well-known public indicators:

Relative Volume (RVI)
• Original idea: Melvin Dickover
• Pine Script implementation used here: “Relative Volume Indicator (Freedom Of Movement)” by LazyBear
Link:

Freedom of Movement (FoM)
• Original idea and calculation: starbolt64
• Pine Script: “Freedom of Movement” by starbolt64
Link:

How this indicator works

Calculates the raw (possibly negative) LazyBear RVI and starbolt64’s exact FoM values
Normalizes and standardizes both over the user-defined lookback
Triggers only when both RVI and FoM exceed the chosen number of standard deviations on the same bar (true Dickover coincident-spike condition)
Applies Dickover’s original price-selection rules (uses current close on big gaps or 2× body expansion candles, otherwise previous close)
Draws a thin maroon horizontal ray only when the new level is sufficiently far from all previously drawn levels (default ≥0.8 %) and the maximum number of levels has not been reached
Keeps the chart clean by limiting the total number of significant defended levels shown

This is not a republish or minor variation of the two source scripts — it is a faithful automation of Melvin Dickover’s specific “defended price line” concept that he manually marked using the coincidence of these two indicators.

Full credit goes to:
Melvin E. Dickover — creator of the Defended Price Levels concept
LazyBear — author of the Relative Volume (RVI) implementation used here
starbolt64 — author of the Freedom of Movement indicator and calculation

Settings (all adjustable):
Standard Deviation Length (default 60)
Spike Threshold in standard deviations (default 2.0)
Minimum distance between levels in % (default 0.8 %)
Maximum significant levels to display (15–80)

Use these horizontal maroon lines as potential future support/resistance zones that the market has previously shown strong willingness to defend.

Thank you to Melvin, LazyBear, and starbolt64 for the original work that made this automation possible.