Support and Resistance levels are widely used for daily market analysis. In fact, they play one of the key roles in setting entries, profit targets and exits. Support and resistance levels are identified based on the price patterns and price forex support and resistance calculator points that took place in the past. Support levels try to stop falling price as it attempts to drop even further.
Resistance levels resist to the rising price that attempts to go even higher. Support or resistance levels that were tested by the price and sustained the pressure by not allowing market to surpass them, are considered as strong levels. If Support level is broken it becomes future resistance level. If resistance level is broken it plays a role of support for future market moves. One of the well known trading tactics is to look at market reaction once price gets close to a Support or Resistance line. Fibonacci retracement and projection levels or with trend lines.
Support and resistance breakout is the most reliable or at least one of the most reliable trading methods. The reason is that when a support or resistance is broken, it will work as a resistance or support, and so, it will make a barrier against the price that doesn’t let the price go against us and hit our stop loss. The lines are drawn with the color and style you choose in parameters. By default, when the price crosses a line you will receive an alert, or a smartphone notification as you like. This tools helps you create horizontal lines by just pushing one key on the keyboard, the line will appear at the mouse position. You can choose two colors, one for the support line and the other for the resistance line. You can delete easily the last line by A key stroke, you can delete as many lines as you want.
You can choose to set alarm, when a support or a resistance line is crossed, the indicator will send an alarm on the screen or to your smartphone if you have activated push notifications. You can use the same windows to see different chart, the indicator automatically hides support and resistance from other symbol and show it again when you come back to the first symbol. The color of the line is automatically chosen, if it’s over the market price, it gets a resistance line color, if it’s under the market price, it gets a support line color. At the top left corner you can see the price at the cursor position.
In the blue circle, you can see the price at your mouse cursor position. The line have been created in few seconds, the style and the color are changed automatically. But you can choose to have smartphone notification or both. If you have other idea, you can share it.
This entry was posted in Indicators. Support is the price zone below the current price where price declines are likely to stop and reverse. Resistance is the prize zone above the current price where price advances are likely to stop and reverse. Measuring Support and Resistance Support and resistance levels are calculated based on how prices behaved at specific times in the past and also on how prices tend to behave in general. If currency price failed to break through a certain level in the past, this level can be expected to block price movement in the future. ALL of the technical analysis tools can be used to identify support and resistance. You can expect trendlines, moving averages and Bollinger bands to support the prices when they are below the current price and to resist the prices – when they are above the market.
Role Reversal between Support and Resistance Support becomes resistance when the prices penetrate it by significant amount – and vice versa. You can see this rule in action if you review how some of the dynamic trends are developing. Most of the times the resistance which blocked previous price thrusts in an uptrend will become support to subsequent price reactions once it has been violated. This rule is applicable to most technical analysis tools. An up trendline can be expected to resist price advances after it has been broken to the down-side.
A moving average which formerly acted as resistance will start to support price declines if it is decisively penetrated. Strength and Probability of Support and Resistance The strength of support or resistance depends on how many times it was successfully tested in the past and on its scale. An up trendline drawn from a multi-year bottom which supported the price five times during the last year is much stronger than a down trendline drawn from a one-month-old peak and which contained only two minor pullbacks. Probability of a future support area depends on the combined strength of all the tools which identify it. The same applies to probability of a future resistance area. The more technical tools of different scale and type coincide in one price zone the higher the probability that this zone will serve as important support or resistance area.
RSI divergence, a hummer penetrating the lower Bollinger band and a round price level. 100-day simple moving average coinciding with the broken major down trendline now acting as support and Stochastic turning from the oversold territory. Price channel projections of the intermediate and the minor trends meeting at a major round-number price level. Meta4: High probability trading setups can be compared to beautiful works of art. If you examine the paintings of any recognized master you will discover that the brush strokes that the artist laid on the canvas – even they differ in width and color – tend to compliment and reinforce each other’s effect, each in its own way contributing to the beauty of the whole picture.