What Are Support & Resistance Levels?
Support is a price level where a downtrend can be expected to pause due to a concentration of demand. As the price of a security drops, demand the shares increases, thus forming the support line. Meanwhile, resistance zones arise due to a sell-off when prices increase.
Support acts as a floor that limits any further downward movement and an area on your chart with potential buying pressure
Resistance, on the other hand, acts as a ceiling limiting further upward movement and an area on your chart with potential selling pressure
Support in the past can mean resistance in the future. The same thing goes for resistance. The Resistance in the past could mean support in the future. Support and resistance levels are one of the key concepts used by technical analysts and form the basis of a wide variety of technical analysis tools.
Both are formed through the actions of the traders in the current market.
What Does This Indicator Do?
We have converted this indicator from the MT4 trading platform to work on the cTrader platform. We had to do an extensive cleanup and bug fixing of the code including adding the alert logic for email and telegram, it can display both weak and strong support and resistance levels on your chart in the form of a box, we decided not to shade the boxes so you can see the candlestick price action.
Dynamic Support & Resistance Zones Created and Removed
This indicator will dynamically add and remove new support and resistance zones as the price action is happening real-time, so you can just leave it running and receive alerts when the price reaches a strong support or resistance zone.
When a zone has been breached it is deemed as no longer a support or resistance level and this zone is automatically removed from the chart.
How To Learn Trading Support & Resistance Levels
Download this PDF document if you want to learn how to trade support and resistance levels by clicking on the link below.
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Duration: 7 minutes