What is the PZ Support Resistance Indicator?
The Pivot Point Support and Resistance Indicator (PZ SR Indicator) is a popular tool in Forex trading used to identify potential levels of support and resistance in the market. The indicator is based on the concept of pivot points, which are calculated using the high, low, and closing prices of the previous trading day. The resulting pivot point acts as a central pivot, with additional levels of support and resistance calculated based on that central pivot.
PZ Support Resistance Indicator Strategy
Here is a step-by-step approach to this strategy:
- Identify the pivot point levels: The PZ SR Indicator calculates and displays the pivot point, as well as several levels of support and resistance.
- Monitor price action: Watch for price to approach one of the support or resistance levels.
- Enter a trade: If price approaches a level of support, consider entering a long position, with a place just below the support level. If price approaches a level of resistance, consider entering a short position, with a place just above the resistance level.
Buy signal
Here is a step-by-step approach to a buy signal using the Pivot Point Support and Resistance Indicator (PZ SR Indicator) in Forex trading:
- Identify the pivot point levels: The PZ SR Indicator calculates and displays the pivot point, as well as several levels of support and resistance.
- Watch for price action: Observe the price action as it approaches a level of support.
- Confirm the buy signal: A buy signal is confirmed when price approaches a level of support and bounces back upwards.
- Enter a long position: If the buy signal is confirmed, enter a long position at the market price.
Sell Signal
Here is a step-by-step approach to a sell signal using the Pivot Point Support and Resistance Indicator (PZ SR Indicator) in Forex trading:
- Identify the pivot point levels: The PZ SR Indicator calculates and displays the pivot point, as well as several levels of support and resistance.
- Watch for price action: Observe the price action as it approaches a level of resistance.
- Confirm the sell signal: A sell signal is confirmed when price approaches a level of resistance and bounces back downwards.
- Enter a short position: If the sell signal is confirmed, enter a short position at the market price.
PZ Support Resistance Indicator Pros & Cons
Pros
- Easy to use: The PZ SR Indicator is easy to use and does not require any advanced technical knowledge to understand.
- Objective: The indicator provides objective levels of support and resistance, helping traders make informed decisions.
- Customizable: The PZ SR Indicator is highly customizable, allowing traders to adjust the calculation method and display parameters to suit their individual needs.
- Visual representation: The indicator provides a visual representation of the support and resistance levels, making it easy to identify potential entry and exit points.
Cons
- No guarantee of success: While the indicator can provide valuable information, it does not guarantee success in Forex trading.
- Support and resistance levels not always absolute: Support and resistance levels are not always absolute and can change as market conditions change.
- Lags behind the market: As an indicator based on past prices, the PZ SR Indicator can lag behind current market conditions, potentially leading to missed opportunities or incorrect trade signals.
Conclusion
In conclusion, the Pivot Point Support and Resistance Indicator (PZ SR Indicator) can be a valuable tool for Forex traders who are looking for an objective and visual representation of support and resistance levels. The indicator is easy to use, customizable, and provides a clear visual representation of potential entry and exit points. It is important to keep in mind that support and resistance levels are not always absolute and can change as market conditions change.
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