Support and Resistance Indicator is a Metatrader 5 (MT5) indicator and the essence of the forex indicator is to transform the accumulated history data. Support and Resistance Indicator provides for an opportunity to detect various peculiarities and patterns in price dynamics that are invisible to the naked eye.
The support and resistance indicator mt5 is built according to the standard zigzag indicator and displays support and resistance levels. The indicator has many settings; if you want to change them, then in the editor of the standard ZigZag indicators (in the indicator properties window – parameters tab) change the value of the parameter “ExtDepth” and set it to 20 for example. In this case, the indicator will display 20 levels of support and resistance. You can also change other parameters, as well as turn off unnecessary lines by setting their length to zero.
Principle of Support And Resistance Indicator MT5
When the price reaches a support level, the chances are that it will rebound back up. A resistance level is more likely to repel price and lead to a bounce down.
The main principle of support and resistance trading is that when the price reaches either of these two levels, it will most likely reverse and continue in the opposite direction. So, when the price reaches a support level and bounces back up, this creates a good opportunity to buy, whereas if it breaks through the support line, this can be an indication for selling.
The opposite goes for resistance levels – if the price bounces down from a resistance line, you have a good opportunity to sell, or if it breaks through – you can buy. Support and resistance are the keys to price action trading and in this Forex price, action lesson master trader Johnathon Fox teaches traders exactly how he goes about marking out on the charts.
How to Set up MT5 Indicator
The MT5 is an important tool for any trader. Because it helps you make the right decisions at the right time. The indicator has minimal settings and works on all pairs, available in the terminal. You can download it using the link at the end of the review.
How to set up
Download the archive with indicator files. Unzip it to a folder. Open your MT5 terminal and navigate to File -> Open Data Folder -> MQL5 -> Indicators. Paste the .ex5 file to the Indicators folder. Restart the platform and open it again. Navigate to Insert -> Indicators -> Custom -> Support_Resistance_Indicator_MT5. The indicator is ready for use now!
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How it works
An important component of technical analysis, support, and resistance levels indicate the level at which price may experience a stall. These levels are plotted in real-time by traders, either manually or using automated tools.
When a currency pair moves higher it will eventually reach a point where the rate of buying pressure slows and begins to decline. This is known as resistance, and is typically caused by a number of factors:
- The market reaches an area of supply (sellers)
- A psychological or round number barrier
- One or more traders taking profit at this level
Once the rate falls below this level and given it has not broken through it, downwards momentum will tend to prevail. Conversely, when the market falls it will reach a point where many sellers are unable to continue selling due to profit targets being met or for whatever reason. This lack of selling pressure allows buying interest to take over and push the price higher again. This is known as support, and is usually caused by a number of factors:
- The market reaches an area of demand (buyers)
- A psychological or round number barrier
- One or more traders willing to buy at this level
- Once the rate rises above this level and given it has not broken through it, upwards momentum will tend to prevail.
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