The Support&Resistance Indicator aims to assist a trader in their everyday trading. It automatically spots the levels the price has actively interacted with before and draws them on the MT4 chart as rectangular areas.
The price range (height) of support or resistance areas depends on the spread between price highs and lows that the level goes through.
Resistance levels are marked in orange, and support levels are marked in blue.
The Support&Resistance indicator does not repaint. However, the occurrence of new highs/lows within the range of a specific support/resistance can expand its height.
The best timeframes to work with are M15-H1.
How the Indicator Spots Levels
There are many approaches to drawing support and resistance levels. For example, the Pivot Points indicator uses data from previous candlesticks for this purpose. In turn, the S&R indicator identifies the levels with the maximum number of price touches.
Touch is a subjective concept since everyone interprets it in their way. Therefore, we used a freely available Fractal indicator to identify touches, which are also extreme levels of the price.
The formula of the Fractal indicator works regardless of the timeframe, so the Support and Resistance indicator works on any timeframe as well.
After identifying and marking the touches, the indicator algorithm will spot the levels with the maximum number of price interactions and display them on the chart.
To see the price interactions with a certain level, click the weight number on the left side of the rectangle.
As you can see, some of the interactions are out of the filled rectangle, but this is not the indicator's error. These touches are used to identify levels more precisely.
Support and resistance levels themselves occupy just under 50% of the area analyzed by the algorithm.
For whom is the Support&Resistance indicator suitable?
Support and resistance are important price reference levels that help traders in making Forex trades. Therefore, the S&R indicator is well compatible with any other indicator or trading system.
If you’re a novice trader, it’s important for you to learn how to draw support and resistance levels by yourself. However, the S&R indicator can be a good help if you don’t have enough skills yet.
The indicator will be useful for experienced traders as well, as it saves time on drawing the levels.
Trading With the Support&Resistance Indicator
There are three major techniques of trading with strong support and resistance levels:
- Rebound (Bounce) from a level,
- Level breakout,
- Retest of the broken level.
Their benefit is that they are quite simple, so even a novice trader can easily use them.
You can find the description for each strategy in the following article – "Strategies of trading with support and resistance levels".
You may also be interested in AutoTrendLines Indicator. It facilitates one of the most challenging tasks for a trader, which is the identification of the main trend. The indicator spots the accurate trend lines and automatically draws them on the chart.
Settings
The window of the indicator's settings has several tabs. As a rule, you shouldn't have any difficulties with them. So we’ll analyze only the settings displayed on the "Inputs" tab.
"Level Settings" Block
- Level Vertical Width is in charge of the maximum height of support and resistance areas. By default, this parameter is set to 5.0. The higher the value, the greater the price range covered by the drawn support and resistance levels.
- Levels Frequency on chart determines the frequency of levels displayed on the MT4 graph. The default value of the parameter is “Normal”.
You can change it to “More” if necessary. In this case, the indicator will show more levels within a similar price range.
You can also select the "Less" option. In this case, only the most significant support and resistance areas will be displayed on the chart. - Breakout sensitivity is the sensitivity of the indicator to level breakout. As soon as the price forms a certain number of fractals outside of the broken level, this level is interrupted. If the sensitivity is high, levels are interrupted more often; if the sensitivity is low, they are interrupted less often. By default, the “Breakout sensitivity” is set to “Average”.
"Display Options" Block
- Levels Display Period sets up the depth of the history used to draw support and resistance levels.
Its default value is “Medium”. In this case, the levels are drawn within the time interval, which is no longer than 600 candlesticks on the current timeframe.
You can also choose the history depth of 300 bars (Levels Display Period="Short") or 1200 bars (Levels Display Period="Long") to draw levels. - Minimum touches to show. By default, its value is set to 5. This means that the indicator will draw only those support and resistance areas with which the price interacted 5 times or more.
- Show touches count. This parameter has only two values: “Yes” and “No”. If set to “Yes”, the number of price interactions with the level (the weight of the level) is displayed next to it. If set to “No”, this information is not displayed.
- Show touches on click displays the price interactions with the level when you click the number. This option allows you to track where and when the price touched support or resistance level. If necessary, the option can be disabled. To do this, set "Show touches on click" to "No".
- Projection length sets the length of dashed line (projection) in bars.
"Color Options" Block
Color Scheme. By default, the indicator automatically detects the color scheme depending on the chart background. If necessary, select the desired color scheme from the list.
Alerts are not available for this indicator at the moment.
How to add Support&Resistance in MT4
Follow the instructions below to install the Indicator to your MT4 terminal:
- Download the ZIP-archive with Support&Resistance indicator file by clicking the link at the top of the page;
- Unzip the file into the MQL4/indicators folder of your terminal;
- Restart the MT4 terminal;
- Run the indicator by double clicking the indicator name in the MT4 Navigator;
- Check the "Allow DLL imports" box and click "OK";
- The indicator will be displayed on the chart;
- Adjust the indicator’s settings according to your needs: press CTRL+I, select the indicator from the list, and switch to the "Inputs" tab.
If you have any difficulties while installing the indicator, please view the detailed instruction.
