Support and resistance levels are key elements on a price chart which traders should be aware of. This is because the market often takes interest on these levels, which often result in a strong market reaction. The Levels Indicator was developed to help traders identify potential support and resistance levels.
The Levels Indicator is a technical trading tool which helps traders identify horizontal support and resistance levels where price may reverse or break out from.
This indicator plots 10 horizontal lines, five of which are support levels and five of which are resistance levels. The support levels are in magenta while the resistance levels are in dodger blue. It also plots a label on each horizontal line shown on the far right edge of the price chart indicating whether the line is a support or resistance line.
The Levels Indicator has a complex algorithm which calculates for the support and resistance levels using formulas that incorporate the price range, the close price, and Fibonacci ratios.
The indicator first calculates for the “Range” which is the difference between the high and the low of price. It then classifies the price range whether it is “Normal”, “Reduced”, or “Extended”. The indicator then assigns multipliers which are based on Fibonacci levels depending on the classification of the price range. The “Normal” range has a multiplier of 0.236 and 0.382. The “Reduced” price range has a multiplier of 0.146 and 0.236. The Extended price range has a multiplier of 0.382 and 0.618. The indicator then plugs in the multipliers on the different support and resistance level formulas. Each support and resistance level has its own formula which is derived from the price range.
The Levels Indicator has several options which modify the presentation of the support and resistance levels.
“Chart period” modifies the timeframe on which the price range is based on. This is preset as a 1 day range. This means that the calculations are based on the high and low of the day.
“Maximum range” and “Minimum range” refers to the maximum and minimum range in points in which the indicator would calculate for the support and resistance levels.
“Color…” allows users to choose the color which would be used to plots each support and resistance line.
“Line style…” allows users to choose what line style is used to plot each support and resistance line.
“The width…” allows users to modify the thickness of the lines which the indicator plots.
“TextSize” allows users to modify the text size of the labels placed on the far right edge of the chart.
This indicator does not provide trade signals based on trends or momentum. Instead, it is very similar to the Pivot Point Indicator since it plots horizontal support and resistance levels based on a fixed formula. However, the formulas used to calculate for the classic Pivot Points is different from the formula used to calculate for the Levels support and resistance values. Traders can observe price action as it touches these levels and wait for possible reversal or momentum breakout signals.
The support and resistance levels that this indicator identifies often coincide with historical swing high and swing low areas. As such, traders can effectively incorporate this indicator with other strategies that use horizontal support and resistance levels. However, it is still best to use this indicator in confluence with other technical indications for better accuracy.
MT5 Indicators – Download Instructions
Levels Indicator for MT5 is a Metatrader 5 (MT5) indicator and the essence of this technical indicator is to transform the accumulated history data.
Levels Indicator for MT5 provides for an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Based on this information, traders can assume further price movement and adjust their strategy accordingly. Click here for MT5 Strategies
>> Claim Your $50 Bonus Here <<
Click Here for Step-By-Step XM Broker Account Opening Guide
Click here below to download:
By: Tim MorrisTitle: Levels Indicator for MT5Sourced From: www.forexmt4indicators.com/levels-indicator-for-mt5/?utm_source=rss&utm_medium=rss&utm_campaign=levels-indicator-for-mt5Published Date: Fri, 20 Jan 2023 11:37:25 +0000