Support and resistance indicator is all about a significant concept in the day to day work of the traders that basically helps in reducing the risks as well as finding more accurate points of entry into the market which is significant.
Support means a level or a zone which aims at working as a kind of an obstacle against then that if the downward price of trends in market. However Resistance is the level of zone which aims at acting as an obstacle against the growth of price.
Support and resistance indicator aims at automatically finding the closest support and resistance level or the zones for the traffic that is loaded.
What are the advantages of Support and Resistance indicator?
The advantages of support and resistance indicator are stated as follows:
- The major advantage is that the indicator aims to work on all of the timeframes however it is considerable or advisable for the individual to choose at least M15.
- The indicator also works on all of the markets.
- The indicator does not redraw.
- The indicator aims to have flexible settings.
What are the disadvantages of Support and Resistance indicator?
The disadvantages of support and resistance indicator are stated as follows:
- The first disadvantage is that there is no surety or guarantee that the levels or zones would work the same way the individual expects from them to be.
- A major drawback is that the indicator does not issue alerts or warnings.
How does the indicator mainly works?
The work or task of indicator is usually based on the fractal indicator that is built into the MT4 platform. The fractal is basically a local extremum term that is described by Bill Williams.
The support and resistance indicator aims to automatically find out the levels or zones where several of the recently formed fractals happen to be located. It is basically a sign that the level or zone works as support and resistance.
Should an individual use Support and resistance indicator ?
Support and resistance level or zone indicator would be useful for all of the individuals regardless of being any expertise.
For the use of beginners:
The indicator could provide the valuable assistance to those people who do not actually know how they could build support and resistance levels on their own.
For the use of experienced traders:
It actually saves the time and also allows the individual to build such strategies by means of combining.
What is meant by Support and Resistance best strategies ?
There are basically three main strategies for the trading based on support and resistance levels those of them are stated as follows:
- First strategy is The reversal.
- Second strategy is The breakout.
- Third strategy is The breakout test.
All of the above strategies would provide profitable yet false signals. The individual should try using each of the strategy on a demo account in order to see which one suits him the best knowing about the requirement.