4 Best Indicator for Support and Resistance Levels

Support and resistance levels are without a doubt one of the most crucial aspects of technical research.
This is a point that any trader agrees with. Some traders use levels directly, placing orders at the
extremes of the range they've identified. At different periods, other traders use supply and demand
balances in their trading strategies. The visual depiction of the sellers' and buyers' struggle zones is
extremely useful and acts as an excellent reference for all market participants. Rate indicators address
the issue of automatically drawing [URL="https://forum.mt5.com/showthread.php?322492-What-is-the-
Characteristics-of-Support-and-Resistance-Levels...&highlight=support+and+resistance+lines"]support
and resistance lines.[/URL]

[B]Support and Resistance Levels Indicators[/B]

[B]1. Zone Indicator[/B]

This is one of the most widely used and effective algorithms for determining high horizontal levels. Even
though Zone isn't included in the regular MetaTrader4 toolkit, it's easy to find and install on your trading
terminal.

Two criteria in particular merit special consideration:[LIST]

[*][B]TF[/B] - the time interval between significant horizontal levels drawn by the instrument. In
minutes, this value is set. For a monthly span of M, from 1 minute to 43299 minutes.

[*][B]Max bars [/B]- the number of bars used to establish the support and resistance boundaries. It is set
to 1000 by default. If other indicators are being used in the trade, you can reduce the Max bars value to
avoid loading the trading terminal.[/LIST]You may adjust the thickness and color of lines, as well as the
font size, in addition to the above settings in the indicator. The zone can be used in dealing in the same
way as other Forex levels measures. If you deviate from the planned boundaries, take advantage of the
opportunity to reach the appropriate location, whether long or short. Trading with the right strategy is a
choice for breakdown stages.

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Unlike other similar algorithms, Zone represents the terminal's most critical stages, from which the price
would almost certainly push off. Near these borders, significant quantities were exchanged. This method
may be used alone or in conjunction with other metrics to validate consumer response at the
approximate time of sales or purchases. You can test the Zone algorithm on a sample account with the
right settings before using it in live trading. You can start trading with real money only after you've
checked that the indicator is working properly. Some seasoned traders recommend adding a Zone to the
chart of the chosen asset with different Time-Frame settings. The reversal levels of all-time periods
would then be visible. This will act as a secondary criterion for entering the market.

[B]2. PowerDynamiteAreas Indicator[/B]

This is a fairly strong and intuitive Forex resistance and support measure. Both beginner and seasoned
traders use a personal digital assistant (PDA). On the terminal screen, the tool allows you to visually
examine the levels, which are distinguished by their weight. Furthermore, such an image can be shown
at any time. It won't take long to locate and set up a PDA. Among the input parameters, the following
are the most important:[LIST]

[*][B]Pivot Strength [/B]- change the level's strength. varies between 1 and 7.

[*][B]Max Look Back Bars [/B]- shows how many candles were used in the calculations.

[*][B]Max Levels [/B]- the maximum amount of assistance and resistance levels shown on the terminal
screen at the same time.[/LIST]In the settings, you can also adjust the thickness of the lines and the
distance between two adjacent horizontal levels. You may use the PDA on its own or in combination
with other indicators to confirm an appropriate time to join the transaction.

[I]There are three possibilities in the first scenario:[/I]

When the price bounces off the level, open a spot. Following an analysis of the pattern, the trader could
wait for the price to bounce off the indicator's line before placing a buy (sell) order. A 3:1 ratio is used
for the take benefit and safety stop loss. On the asset hourly table, this is the minimum ratio for trading.

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Taking a spot after a level's breakdown. If the situation unfolds as follows, this choice allows you to
enter the market. The price re-crosses this boundary in the same direction after breaking through the
level and then repairing it, as seen in the chart below. The end of the candle will serve as a signal to
enter a trade.
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Using the lateral price spectrum to trade. The PDA tool draws the battle lines between sellers and
buyers in this situation. In the allocated hallway, the price adjusts. It's necessary to wait for a candle
with a medium or long beam near the border to appear and point in its direction (as shown in the
figure). You can enter a long or short position after the candle's final formation, with a stop loss per
level.

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The undeniable benefit of the PDA is that even an inexperienced trader cannot question an indicator's
ability to accurately visualize substantial levels of support and resistance. The trader receives a good
filter of signals advising him not to enter the market in front of a strong obstacle while using this special
intraday trading method. Naturally, you can consider the most relevant news events while investing, as
the price will then break through large levels and go even higher.

[B]3. Line Algorithm[/B]

It is one of the most straightforward measures of support and resistance levels for intraday trading that
does not need redrawing. The algorithm's unique feature is that it shows two resistance lines and two
support lines on a traded asset's chart.

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Many of the lines are drawn in a variety of colors and thicknesses. Differences indicate different degrees
of significance: [LIST]

[*]Red support and Blue resistance are more significant.

[*]Red support and Blue resistance are secondary boundaries.[/LIST]The extent of significant levels
exceeds that of secondary levels. This can be seen in the diagram.

Parameters for more important boundaries are given in the Lines settings - X1, Y1, L1, L2. X2, Y2, L3, L4
for secondary. The details of using Lines are determined by a four-level visualization on the computer.
Traders who have used this method in their trading suggest setting a specific time interval for their
settlement period. As a result, you can keep track of the changes in the levels' positions.
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If this role remains unchanged for an extended period, the price would shift inside the channel. As a
result, it's a good idea to use a price level rebound strategy, which involves placing buy and sell orders. It
is very relaxing. The most important thing is to open short and long positions at the appropriate times.
You may use pending orders as a strategy. If essential price levels are broken, use the required trading
strategy. Using pending orders as well.

[B]4. PZ Levels[/B]

PZ is another metric for determining the value of stages. Drawing relevant and less meaningful price
boundaries on the chart by hand is difficult for an inexperienced trader. The fact that the information
given by numerous analytical organizations is interpreted differently explains their diversity. The PZ
indicator measures each degree and shows it on a chart with a certain thickness based on its
significance. Individual boundaries, which have not yet formed, are shown as a dashed line.

[B]Advantage of Algorithm[/B][LIST]

[*]Price behavior is evaluated near the formed extreme point.

[*]Simultaneous analysis at four-time intervals The speed (slow, fast) of its movement is revealed. This is
the supply and demand zone's power.

[*]The ability to customize instrument parameters for your trading device.

[*]The ability to combine fairly closely spaced levels into one.

[*]The absence of redrawing and the prospect of sound warnings.[/LIST]All PZ parameters are divided
into three categories: those that influence the analysis's performance, those that tune and show the
results - visualization, and those that include notification options such as phone, email, and sound. The
indicator is simple to download and set up in your trading terminal.

Traders who have used the PZ algorithm in practice recommend using it to hang up from levels in
trading. It works out very well in channel strategies. Candlestick patterns may be a precursor of a
reversal. According to the theory of action, many level indicators are identical to one another and
perform the same functions. Even though each of them has its distinct personality. As a result, each
trader selects indicators after thoroughly testing them in practice.
[B]How to Identify Support?[/B]

Any price point that prevents the price from dropping further is considered support. The support's
power is determined by whether it causes a temporary pause or a lasting reversal. At support, demand
is greater than availability. To find help, do the following:[LIST]

[*]Draw a straight line from the bearish reversal points to the bullish reversal points.

[*]It becomes a key point in the future, as traders want to use it as a guide for long trades if the line
connects more than three reversal points.

[*]In the future, it will be a key point because traders will use it as a reference point for long trades.
[/LIST]

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The market bounces off the same amount, 0.83359, three times in the EUR/GBP chart above. It means
that the commodity is in high demand. Good supports like these are the perfect entry points for long
trades.

[B]How to Identify A Resistance?[/B]

During an increase, resistance is a point where price action pauses or changes direction. At resistance,
the supply exceeds the demand. To spot resistance, do the following:[LIST=1]

[*]Draw a straight line connecting the reversal points; it becomes a resistance if three or more points
kiss the line.

[*]Its power is directly proportional to the number of times it has reversed.

[*]When something happens twice, it's a coincidence; but, when it happens three times, it's a trend. It
also confirms it. The same can be said for the trendline.[/LIST]

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Point 1.00415, as seen on the USD/CHF regular chart, acts as high resistance. It acts as a wall and
initiates a sharp down step each time it reaches the 1.00415 marks.

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Keyword: forex support and resistance levels indicator

Link to compete: https://fxssi.com/support-and-resistance

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