Support-resistance levels are two of the most popular ideas in technical analysis, which are commonly used in forex and stock trading. Learning how to determine precise support/resistance levels is the primary skill you need to develop for conducting technical analysis.
In this guide, we’re introducing you to the Important Support Resistance Price Zones Indicator and showing you how to recognize them correctly, provide some examples, and go over some unique things to keep in mind while employing this useful technical tool in your MT4 platform.
What is the Important Support Resistance Price Zones Indicator?
The Important Support Resistance Price Zones Indicator determines critical price zones watched by big banks, financial institutions, and numerous forex traders monitor.
It’ll highlight the key S/R levels where significant price changes with profitable possibilities will take place. Any experienced forex trader should keep an eye on these price zones.
The blue rectangle at the bottom of the chart shows support zones. Conversely, the red rectangles represent resistance zones. We’ll determine possible buy-sell opportunities based on the price behavior around the important support resistance price zones.
Alternatively, the S/R levels can help you determine solid price breakout zones. For example, the price aggressively exceeding a resistance(red box) indicates an extended bullish move.
Furthermore, you can set the stop-loss limits for your entry based on the key price zones outlined by the indicator.
Important Support Resistance Price Zones Indicator Trading Strategy
The Important Support Resistance Price Zones Indicator may require additional confirmation while determining a buy/sell opportunity.
You can use chart or candlestick patterns to ensure whether the price is rejecting an S/R zone or not. For example, a bullish hammer right above the blue box can be an ideal option for placing a buy order.
Besides, moving averages and momentum oscillators can also be ideal companions for the support/resistance price zones.
Here are the buy conditions of the Important Support Resistance Price Zones Indicator:
- The price rejects the blue support zone.
- The support level is labeled as “verified support.”
- Enter buy following bullish candlestick patterns above the support.
- Stop loss below the immediate support level.
- Take profits once the price denies exceeding the red zones.
Here are the sell conditions of the Important Support Resistance Price Zones Indicator:
- The price rejects the red resistance zone.
- The resistance level is labeled as “verified resistance.”
- Enter sell following bearish candlestick patterns below the resistance.
- Stop loss above the immediate resistance level.
- Take profits once the price denies moving below the blue zones.
Important Support Resistance Price Zones Indicator Pros & Cons
- Highlights potential trade entry & exit zones.
- Determines critical support/resistance levels on multi-timeframe charts.
- Shows verified and untested S/R zones separately.
- Suits all trading strategies.
- Includes on-screen and sound alert features.
- The price may plot false breaks at the support resistance levels during choppy market conditions.
- The indicator cannot generate buy-sell signals alone.
The Important Support Resistance Price Zones Indicator represents an ideal automatic MT4 price level indicator developed to aid beginner-level technical traders in forex and stocks. Whatever approach is employed, the result is the same: it displays the probable highest and lowest price of an asset. It is used to determine the optimal entry and exit prices and precise times for trading.
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