The best Support and Resistance indicator for mt4.
Finally, a multi-timeframe dynamic support and resistance indicator that helps you automatically identify strong zones to buy and sell from.
Toggle over 9 different time frames Overlap various time frames for stronger levels Smart filters for more accurate levels.
Multiple Swing Low / High Scanner Overlap Support / Resistance Pullback Support / Resistance.
Adjust the strength of each time frame One-click strict settings Individual settings for each time frame.
Support and Resistance Trading Strategy.
A proper guide to understanding how to trade support & resistance profitably. Crafted by a team of CMT, CFTe & CFA certified traders.
Trading purely based on support and resistance can be a very profitable strategy – but only if you do it correctly. I am a full-time trader running an award winning research firm, providing analysis for the largest banks and brokers in the world. My personal trading method (on top of support and resistance) involves using Advanced Fibonacci Retracements , Candlestick Patterns (really important), True RSI and proper trade management . Below is a short video I was featured in showing the day in my life as a trader.
Before you can even begin to trade support and resistance, you need to understand how to interpret it and most importantly, how to filter out the good zones from the bad zones. Notice I say zones here and not levels . Because support and resistance works in the form of zones (areas), not specific levels.
Today we will be covering a few things, in particular, to prepare you to not only use this support and resistance indicator but also to make good money trading it.
Agenda for today:
Support and Resistance Simplified Understanding Swing High and Swing Low Areas Identifying swing high and swing low areas on the indicator. Identifying pullback support and resistance on the indicator Identifying overlap support and resistance on the indicator Improving Your Accuracy with Fibonacci Retracements Improving Your Accuracy with Stochastic Improving Your Accuracy with RSI Improving Your Accuracy with Price Action Improving Your Accuracy with Correlation.
At the end of this topic, you should be well on your way to making seriously good money using support and resistance to trade.
Here’s a simple Table of Content list so you know what we will be covering today (it’s a lot lol)
Table of Contents.
Do you have a video explaining everything?
Sure! Watch this video as I go into how I use support and resistance in my trading strategy.
In this video below, I share about how I use support and resistance in my trading strategy. This simple approach has helped me trade full-time profitably. Well, it’s simple but tough to master. It requires a combination of support and resistance, Fibonacci retracements, Fibonacci extensions, True RSI and proper trade management.
Support and resistance simplified.
Back to basics my friend.
It's important to know that support is always below price and resistance is always above price.
Let us first properly define what Support and Resistance levels are before moving further (to avoid any confusion).
Resistance = any level that is above price.
Support = any level that is below price.
Support and resistance levels are essentially key levels a person should watch out for because previous price action between the bulls and bears have given us a key sign into the importance of those levels . See price failing to break above this resistance line for the past 3 times? That’s clearly a strong level to pay attention to.
If you see price failing to break below this horizontal support line multiple times, it is a strong level to pay attention to too. One of the most common questions we’re asked is how to determine resistance and support lines – especially which ones are the most important since based on how we draw them, almost every level can be an important level.
Diagonal vs Horizontal.
Which is more accurate?
Quite simply put, there are many ways to draw support and resistance lines, but only a few correct ways to do so.
There are ascending/descending lines such as diagonal lines (most inaccurate) because the subjective nature of taking the proper levels is too subjective. If you get one point off by 1 pip, the line goes way off tangent. There are channels which require at least 2 points on top and 2 points below which are fairly more accurate. This is because you are essentially taking a minimum of 4 points. Then there are horizontal support/resistance levels which are the most accurate because it leaves extremely little room for subjective interpretation. To this tune, we’ll be focusing on the key support and resistance levels from such horizontal lines/areas.
What makes the TFA Support and Resistance Indicator different?
Versus the other 100 indicators out there.
What makes this support vs resistance indicator different from all the hundreds others out there is that it filters out a lot of the weak levels and on top of that, it doesn’t only find support and resistance levels, but instead more importantly, find support and resistance areas . Now, this is not some “demand/supply zone” indicator which many people are familiar with, it’s way better than that.
Using areas (instead of lines) gives us a much better idea on which levels to watch out for. After years of testing, the most important support and resistance levels can be broken down into these 3 :
1. Swing highs / Swing Lows.
These are levels where price just reacts and bounces off multiple times. The more times price reacts off these levels, the stronger they are. Here’s a picture of how swing highs look like :
Multiple Swing High Resistance.
2. Pullback Resistance / Pullback Support.
Pullbacks occur when a swing high/low has been broken – then price makes a “pullback” to the level. In the picture below, you can see that once our swing high resistance is broken, it turns into an “overlap support”.
Journey of how a swing high resistance turned into a pullback support then into an overlap support.
3. Overlap Resistance / Overlap Support.
An overlap support/resistance can only occur when price has broken a swing high/low and made a pullback to the pullback support/resistance. Only after price has bounced off our pullback support/resistance, then it turns into an overlap support/resistance. You can similarly refer to the picture above to better understand.
Video of our support and resistance indicator in action.
Watch me as I explain how to use this powerful tool in my own trading.
Explaining Resistance.
Learn how to identify resistance zones with our support and resistance indicator.
Remember : Resistance is always above price. Support is always below price .
We will now look at how our Support and Resistance indicator for MT4 identifies the 3 major types of support/resistance as mentioned above : swing high, pullback and overlap.
Finding swing high resistance on our MT4 Support & Resistance Indicator :
This is really straightforward. We don’t just pick any swing high, we pick the major swing high. How we define major swing highs here is based on the parameter we can adjust called “ Swing sensitivity “. The higher this value, the more significant our swing highs are.
This picture below is when we have a swing sensitivity of 100 . This means we only pick swing highs where there are more than 100 bars to the left and right of the major high. Notice there are just a few major lines?
Swing sensitivity: 100.
These swing high and swing lows have a sensitivity of 100, meaning the are bigger and stronger.
Swing Sensitivity: 30.
If we adjusted our swing sensitivity to something like 30, this would result in a lot more weaker lines appearing. This would mean there are many weak swing highs.
These swing highs have a sensitivity of 30, meaning they are weaker (and hence there are more of them)
Combining swing highs to create strong areas of resistance.
Now, when more than 1 swing high combines, it becomes a strong level of resistance. This is shown by a highlighted area on the chart with our MT4 indicator.
What our MT4 Support and Resistance indicator does is that it intelligently scans the entire chart for such levels and if they are close enough, they are combined to form a swing high resistance area .
When multiple swing highs line up together, it creates an AREA of resistance.
Finding pullback Resistance on our MT4 Support & Resistance Indicator.
Now that we have covered how swing high resistance looks like, l et’s look at the next strongest resistance: the pullback resistance.
Pullback resistance is formed when a swing low is broken and price makes a “pullback” to that previous level. In the example below, we can see that price broke a swing low resistance turning it into a pullback resistance.
The Support and resistance indicator for MT4 will highlight the pullback resistance for you.
Finding Overlap Resistance on our MT4 Support & Resistance Indicator.
Once we have found a pullback resistance, it is important to keep an eye on this level. Because once price reverses off it, it becomes an overlap resistance.
Pullback resistance turns into a strong graphical overlap resistance if price reverses off it. This shows that there are more bears than bulls at this key decision point.
The support & resistance indicator would highlight where the graphical overlap resistance (or support) occurs.
Download and give it a shot.
Trial version works on AUDUSD, USDJPY and GBPUSD.
Explaining Support.
Swing low support, pullback support and overlap support.
Remember, as I mentioned earlier, the Support is always below current price. Resistance is above price, support is below price. Do not confuse the two.
Finding Swing Low Support with our MT4 Support and Resistance Indicator.
We talked about “swing sensitivity” earlier. This is essentially the number of bars to the left/right that makes up a major swing low. The higher this number, the stronger the support.
Below is a simple example of a swing low support (green line) with swing sensitivity of 20. You will immediately notice that there aren’t many lines that are drawn on the chart as we filter out a lot of the noise with a decent swing sensitivity number.
Our support and resistance indicator automatically scans for key swing low support levels.
Combining multiple swing lows to create strong areas of support.
The key to finding strong areas of support is to combine multiple swing low levels together. Now, this is not one exact level. This is very often an area . Our indicator scans the past and present to find whether there were other big swing low support levels that occured near that area. If there is, it highlights the area on the chart.
When more than 1 swing low combine, it becomes a stronger level of support.
The indicator automatically detects where multiple swing lows occur to create a strong area of support.
Finding Pullback Support with our Support and Resistance Indicator.
On top of finding swing low support areas, another really strong sign of support is what we call the pullback support .
This is when a previous swing high is converted into a support because price had broken above it and is now dropping to test it again.
In the picture below, you can see how this works out.
Automatic detection of support area (pullback support).
How to find Overlap Support with our Support and Resistance Indicator.
An overlap support is perhaps one of the strongest signs of support. How it works is really simple – it is a natural evolution of the pullback support we mentioned above.
This pullback support turns into a strong overlap support if price bounces off it the very first time it touches it. This shows that there are more bulls than bears at this key decision point.
Support and resistance indicator settings.
How to tweak and optimize it.
If you haven’t watched the video I mentioned above, I highly recommend watching this video to understand how I would use the Support and Resistance indicator before we go any further into understanding how to tweak and adjust its settings.
There are a few settings that you should understand about this indicator to better help you use it effectively.
Multi-Time Frame Selector.
The multi-time frame selector allows you to activate different support/resistance lines from other time frames to be viewed on your chart. In the picture below, you can see that even though I am on my H1 chart, I can activate the H4 support/resistance levels to see if there are any levels on the higher time frame I might have missed out on. This resulted in a big swing high I might have missed being shown.
Our support and resistance indicator has a multi-time frame feature. (Click to expand picture)
SwingSensitivity : This is how many bars you would need on the left/right of a high/low to create a swing high/low. This means that for example, if you have 20 as this value, then the swing high would require 20 bars to the left and to the right of it to be lower than it to create the swing high point. The higher this value, the stronger the swing highs/lows you identify.
InitialPips : What the indicator does is it takes these swing highs/lows and plots a line to detect whether it coincides with other swing highs/lows. The InitialPips value is the ‘buffer’ it uses to detect whether another swing high/low is near it. A value of 5 would mean it scans 5 pips above and below the first swing high/low for any other swing high/low to reach it. The key idea here is to find areas where multiple swing high/lows coincide.
1 min chart : 1 5 min chart : 3 15 min chart : 5 30 min chart : 7 1 hr chart : 10 4 hr chart : 30.
This is not a hard and fast rule, rather, the main idea is to provide more scanning area for overlaps as the time frame goes bigger.
FurtherPips : Once the second swing high/low is reached, the indicator will use this new resistance/support area and do a modified scan based on FurtherPips. This works the same way as InitialPips.
1 min chart : 1 5 min chart : 3 15 min chart : 9 30 min chart : 15 1 hr chart : 25 4 hr chart : 50.
This is not a hard and fast rule, rather, the main idea is to provide more scanning area for overlaps as the time frame goes bigger.
BrokenCount : This value scans how many times the particular support/resistance identified has been broken. The more times a support/resistance level is broken, the weaker it is. A value of 0 means that the level can be broken only once. If it is broken a second time, it disappears.
BrokenBars : This is the number of bars that must be closed below the support/resistance level for it to be considered truly broken (links with BrokenCount above). The reason for this is sometimes price tests these support/resistance levels and bounces back (like a doji). This actually means the support/resistance level is stronger and such a filter allows us to prevent such price action from tricking us.
I prefer to keep this at about 3 across all time frames.
ToggleStrength : This toggles the thin lines with only one swing high/low and the thicker lines with at least 2 swing high/lows connected. This helps you pick out which are immediately the stronger levels to watch out for.
Here’s an image without the ToggleStrength. Notice how there are many more lines which have just 1 swing high/low on it. These are pointed out by the green arrows.