What’s the best support and resistance indicator? While there are many indicators to choose from, there are certain ones that are better than others, which makes them great trading tools. In this article, I will be discussing the best support and resistance indicator that you can use on MetaTrader 4 and 5. I will also compare and contrast it with other, similar indicators in terms of performance and use-case scenarios.
What is support and resistance Indicators
Using an effective set of support and resistance indicators can help traders to understand and anticipate price movements, and thereby increase their chances of success. In trading, when the prices reach or surpass a particular level it is said to be at resistance or at support. A resistant level is where buyers are not willing to buy it anymore. Conversely, a support level is where sellers are not willing to sell anymore. The movement above or below these levels indicates that there could be a change in trend (the new direction will then lead to another resistance or support). These levels also serve as pivot points for price movement with less likelihood of rejection from participants in either direction.
How To Use This Support And Resistance Indicator
The easiest way to explain support and resistance is with a chart. Charting a specific currency over time, you’ll see that it bounces up and down off of certain levels (support and resistance). This indicator adds lines on your chart at these significant levels, allowing you to visually identify potential entry points into trades. Typically, support is where price bounces after it has been falling and resistance is where price bounces after it has been rising. When support or resistance is broken through on high volume, that means an indicator of momentum. Breaking through either indicates very strong likelihood of further movement in that direction (this can be both good and bad). To use these lines properly, wait for them to be broken through on high volume before entering into any trades around those levels.
How this support and resistance indicator works
There are several technical indicators which traders use to measure support and resistance levels. With an indicator like Bollinger Bands, you simply place a moving average on top of price action and look at standard deviations or bands outside of that moving average to determine areas of support and resistance. A lot of traders will also use trend lines in conjunction with other methods when trying to determine price movement. Trend lines essentially connect prior tops/bottoms with highs/lows along with extensions that take off from those points. All these different tools are used in order to predict where prices may be heading next, but more often than not, they serve as just one piece in a much larger puzzle.
S&R indicator on MT4 and MT5
The best support and resistance indicator that you can find is on MT4, but also on MT5. The reason why it is so great and reliable is because it has no time limitation. This means that you can use it to trade during all time frames whether it’s a 1 minute chart or a 5-year chart. You can set up your indicator to be as complex or as simple as you like; there are many different ways of setting up S&R indicators and we’ll get into those shortly, but first lets take a look at how to install and configure our indicator