Which indicator is best for support and resistance?
Which indicator is best for support and resistance?
4/8 Line (Major Support/Resistance) This line provides the highest amount of support and resistance. This line acts as a solid support when prices are above it, and as the dominant resistance when prices are below it. This price level is one of the best levels to place a new sell and buy.
How do you use a support and resistance indicator in mt4?
All you need is to follow several simple steps:
- Identify the bearish reversal point.
- Draw a line from it.
- Keep an eye on the number of points the line connects. If there are more than three points, you can consider it as strong historical support.
What happens when support and resistance meet?
When support and resistance lines cross each other they can interact with a trend and cause it to breakout in a different direction. These are called confluence areas. These can help you anticipate breakouts from the main trend.
How does resistance and support work?
Support occurs where a downtrend is expected to pause, due to a concentration of demand. Resistance occurs where an uptrend is expected to pause temporarily, due to a concentration of supply. These levels, while they may appear arbitrary at first sight, are based on market sentiment and anchoring.
How do you draw support and resistance lines?
Trendline support and resistance lines need to have at least two price-point to be drawn. Simply connect two swing highs or two swing lows in a price-chart with a trendline, and project the trendline into the future.
What is Swing High Swing Low?
A swing low is when price makes a low and is immediately followed by two consecutive higher lows. Likewise, a swing high is when price makes a high and is followed by two consecutive lower highs. The first chart below shows this definition in action on the price chart.
What happens when a stock breaks resistance?
When a stock price breaks a resistance level, old resistance becomes new support. When a stock breaks a support level, old support becomes new resistance. In the majority of your trades, the stock will test the level it has broken after the first couple of days.
https://www.youtube.com/watch?v=CZo0voMS9_I
