Use the support and resistance indicators on MetaTrader4 (MT4) or TradingView.com to mark the recent swing highs and lows in price. This, in turn, can help identify the trend and spot potential reversals. Use the indicator as a trend confirmation and analysis tool, but not for trade signals.
Support and resistance are more than just lines drawn at price highs and lows on a chart. Support and resistance levels on a price chart are dynamic and may be horizontal, sloped, or projected. While drawing lines at recent highs and lows is one of the most basic forms of support and resistance, some new traders like to see the recent highs and lows marked on their charts. Having this gives a more pronounced picture of whether the price is rising or falling.
A support and resistance indicator draws horizontal lines at recent swing highs and swing lows. During an uptrend the horizontal lines along both the swing highs and lows move up. When that no longer holds true, the uptrend may be reversing to the downside. For a downtrend the horizontal lines will be dropping. When they start to rise, the uptrend may over and an uptrend starting.
There are a number of support and resistance indicators for MetaTrader 4 (MT4) and TradingView.
Support and Resistance Indicators for MT4
The first indicator is Support and Resistance (Barry). It is a simple indicator that draws dots along recent high points and low points. The lines extend out to the right until another new high or low forms, then a new line is drawn.
On the EURUSD chart below the lines move with the price, forming higher horizontal lines along the highs and lows as the price makes upward progress. This helps spot the trend and also see when the trend is reversing.
To use the support and resistance indicator, download the indicator via the link above and place it in your “Indicators” folder within your MT4 folder. The “Indicators” folder is inside the “Experts” folder. Launch your MT4 platform and add the indicator. On the “Insert” menu go to Indicators, then “Custom” and select Support and Resistance (Barry) to apply the indicator to the chart.
Alternatively, open your MT4 platform and go to the Code Base tab. Sort by name, then scroll to “Support and Resistance”. The indicator description is “Support and resistance indicator.” Right click on the indicator and select Download. The indicator is now under Insert>Indicator>Custom.
Other than changing the indicator colors (if you wish), there are no other settings to configure.
An indicator that is very similar to the one above, but is more customizable (and therefore preferred for more advanced users), is the PZ-SupportResistanace indicator. Give them both a try. Play around with the PZ-SupportResistance settings and see which one you like better.
TradingView Support and Resistance Indicators
Most charting platforms, that allow for customized indicators, will have have support and indicators. I use TradingView.com and have noticed a few support and resistance indicators (created by other traders) that you may like.
“[RS]Support and Resistance VO” draws lines along major support and resistance and levels. It then shades in a color, grey for uptrend or pink for downtrend. These colors can be altered in the settings for the indicator.
To add the indicator, open a TradingView chart. Click Indicators. In the search box type “support” and you should see the indicator name mentioned above in the list. Click on it.
There are loads of other support and resistance indicators available on TradingView. The “Swing high low support & resistance, by Patternsmart” is similar to the “Support and Resistance (Barry)” indicator discussed in the MT4 section.
Using the Support and Resistance Indicators
These indicators are not required for successful trading. I don’t use these indicators anymore, but I did find that indicators like this helped me to see the trend better when I first started trading. You may find the same thing, or not. As mentioned before, in an uptrend we want rising swing highs and lows, and in a downtrend we want the swing highs and lows falling. Since I am always looking to trade in the direction of the trend, these indicators act as a confirmation tool. They may also alert you when the trend is changing. Try them out and see if they help you read the price action better. If they don’t, then delete them.
Indicators are tools to help us in our own decision making, and shouldn’t be relied on exclusively. Because the indicators use fixed inputs, and don’t adapt, they may produce false signals or occasionally give us a false interpretation of the trend. Therefore, if you opt to use the indicators, still do your own analysis of the impulsive and corrective waves within a trend. Don’t use the indicators for entry signals, they not meant for that. They are meant to aid in analysis.
If you use one of the indicators, after a while you’ll likely find you don’t need it anymore, because you will be able to spot trends and reversals clearly on your own.
By Cory Mitchell, CMT
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