Support Resistance 6.4
PZ Support or Resistance is a powerful technical indicator for Metatrader that simplifies your technical analysis by automatically plotting horizontal support and resistance lines. These lines are key levels in the market where price has a tendency to either bounce off of or break through. Support levels indicate a price level where buying is likely to occur, while resistance levels indicate a price level where selling is likely to occur.
This multi-timeframe indicator uses the same precision as a human eye to detect and plot these levels, so you don't have to waste time doing it yourself. With customizable timeframe selection, you can read price levels from the timeframe of your choice and detect important price levels at a glance. The indicator also displays the relative strength of all price levels, so you can make informed trading decisions. The lines become thicker and darker over time, making it easier to evaluate price levels, and unimportant levels are cleared regularly to reduce noise.
Using support and resistance lines in your trading strategy can help you determine key levels where you can enter or exit trades. When the price approaches a support level, it's a good opportunity to buy, and when it approaches a resistance level, it's a good opportunity to sell. Additionally, the indicator also features email/sound/push alerts for breakouts and false breakouts, so you can stay on top of market changes and take advantage of new trading opportunities.
Features and benefits
- Customizable timeframe selection
- Read price levels from the timeframe of your choosing
- Detect important price levels without browsing through charts
- Recognize the relative strength of all price levels at a glance
- Price levels get darker and thicker as they get rejected over time
- Unimportant price levels are cleared regularly to avoid noise
- It implements email/sound/push alerts for breakouts and false breakouts
- The indicator displays the age of all price levels
A brief introduction
Resistance and support lines are price levels which temporarily halt or reverse the continuous movement of the trend. When the trend is bearish, support lines are created where sellers are temporarily (or sometimes permanently) exhausted and cannot press the quote any lower. Conversely, during a bullish trend, the price level where buyers are checked is called a resistance line.
How are support and resistance levels created?
When a dealer enters a buy order, the broker has the order filled by executing as many offers as possible until the amount the customer desires is reached. If the original order is a large market order, the broker will keep climbing on the price ladder until the order is fulfilled. Support and resistance points are created when the total orders in the market are not enough to clear the offers at a particular price level. When the orders are sell orders, and there are more than enough buyers at a particular price to exhaust the sellers, that price level is called a support; when there are more sellers than the buyers' orders can clear, the price level is a resistance.
Since many participants expect a price level to resist or support the quote, that price level will act in the anticipated manner regardless of what the other variables suggest. In a sense, technical analysts claim that traders behave like pack animals.
Why support and resistance levels work
Emotionally charged events are remembered better and have a stronger impact in human behavior. The market causes joy or trauma to its participants and this is why support and resistance lines work. But there are a few more reasons.
- Resistance and support are relatively easy to identify on charts. From the most seasoned analyst to the forex freshman, traders don't have a lot of trouble identifying and drawing support and resistance lines.
- Support and resistance lines often receive a lot of attention from news sources like Bloomberg or CNBC. The public is led to identify a particular price as a decisive or key level, and when it acts accordingly, the significance of these levels is easily established.
- Support/resistance lines are not just imaginary lines drawn at the whim of the analyst. Multi-year, multi-month, multi-week support and resistance are often defended by large order clusters, originating enormous transaction volumes.
- Choose the period to read price data from. Can be current or higher.
- Zigzag period used to read price points from. Zero means the indicator will choose the best period.
- ATR Period
- ATR period used to collapse prices by proximity.
- ATR Multiplier
- ATR multiplier used to collapse prices by proximity. A higher value will produce less lines.
- Max History Bars
- Amount of past bars to iterate in the indicator finding prices.
- Color Settings
- Enter your desired colors for support and resistance lines based on importance.
- Label Settings
- Display or hide age labels and customise colors and sizes.
- Enable display/email/push/sound alerts for breakouts and fake breakouts.
- Why do past support and resistance levels move?
- Past price levels are adapted to the current market action, in order to connect as much past price action as possible with the current rejected level. If you want price levels to stay just where they were, decrease the SmoothFactor parameter.
- Why am I seeing different line colors on the chart?
- Different colors and line widths are used to inform about the relative strength of the different support and resistance lines present in the chart. Dark colors and wide lines are strong price levels, while soft colors and thin lines are price levels which have not been rejected many times in the past.
- What are the dotted red price levels?
- Dotted red lines are short
- Hey! I have seen a price level dissapear. What happened?
- Don't worry about it. Unimportant and old price levels are cleared regularly to avoid noise. A price level that has been rejected several times is never deleted from the chart.