Support and Resistance Lines


Learning to understand the markets is critical to your success as a binary options trader. An essential part of this is choosing and using the tools and techniques which will most benefit you and your approach to trading. Whether you like taking risks or prefer to play it as safe as possible, the support and resistance approach will enable you to assess the market and place the best trades.

InvestManiacs advise you to use only reputable US binary options brokers. Try BinaryMate

Understanding this indicator is paramount to any type of trade; it forms the basis of all other technical trades. Whilst it is possible to locate the support and resistance on a price chart yourself, it is much easier, especially for beginners, to use a custom indicator.

What They Are

As with most other technical approaches, the two elements of this indicator can be described as just two lines drawn onto a price graph. However, each has an important part to play in understanding the market. The point of resistance is when the market no longer accepts the prices increases of a particular asset and pushes them back down, this can often happen several times but the more times it happens the stronger the point or line of resistance becomes. The Support line if the opposite of this, preventing falling prices from going too low and pushing them upwards.

Are several options for successfully identifying these two points on a chart, the Fibonacci and Pivot points have both proved to be good at locating these indicators. The fact that these two tools are already used by many traders simply helps them fulfill their role.

It is also possible to identify these lines by using what is usually referred to as dynamic S/R. This approach relies on moving averages; the support and resistance will constantly move when using this approach as the information used to calculate them adjusts constantly. In many ways this can be seen as the most accurate approach.

The two lines on the chart are not definitive; it is possible and sometimes important for the price of an asset to go past the point of support or resistance; this can show a trending price and persuade you to trade on an asset; however to do this it is important to be aware of what the market as a whole is doing and particularly any big news stories. The more you become able to locate these levels the easier you will find it to understand how the price fluctuates around these levels and where the potential is for making money via trades.

The Indicator

The best and safest way of ensuring you have correctly identified any support and resistance level is to use a custom indicator. Over time you may wish to skip the indicator and rely on your own judgment but it is definitely the best way to start using this tool.

Start by opening your usual MT4 trading platform, if you click on file you will be given the option to select the data folder click on this and a pop-up window will appear which will allow you to see a folder called MQL4. If you open this you will be able to access the indicators folder and you can paste the .rar file, which you downloaded with the indicator, into it. You can then close all the boxes, including your trading platform. Start your trading site again and you will be able to click on the insert option. From here you can follow the instructions; this involves selecting indicators, then the custom option, before finishing with support / resistance. This will make your new tool available and useable with any price chart; automatically showing you these critical points.

Disadvantages of this tool

  • It is simply not possible to be accurate every time when drawing this information onto your charts. This is true whether you use automated software or create the points manually.

  • The indicator sees these points on a chart as constantly moving and, therefore, will draw several lines where someone who creates the points manually will simply draw an area of resistance or support. Of course, the more you become aware of this fact the easier it is to adapt your strategy accordingly.

Advantages

  • The tool provides you with a reference point for your resistance and your support points. Not only is this essential to good trading, it is also an excellent way of you improving you r understanding of this technical analysis. The tool can simplify your need to it as part of a successful approach to trading. Ultimately you will find that the indicator is of little use as you will correctly locate the right levels yourself.

It is important to note that this is a tool to help you trade; it is an excellent way of checking that the trade you intend to place is accurate; you should never use this indicator by itself as it will not provide enough understanding of the market to allow successful trading.

TOP BINARY OPTIONS BROKERS

BROKER Details U.S.-friendly? Info RATING
BinaryCent
BinaryCent

TRADE!
Min. deposit:  $250
Min. invest.: $0.10
Return: 91%
Trading: Binary
Autotrade: GO!
REVIEW
5.0
Binary Mate
Binary Mate

TRADE!
Min. deposit: $250
Min. invest.: $1
Return: 92%
Trading: CFD, Forex, Binary
Autotrade: GO!
NoREVIEW
4.9
Finrally
Finrally

TRADE!
Min. deposit: $250
Min. invest.: $10
Return: 91%
Trading: CFD, Binary
Autotrade: GO!
NoREVIEW
4.7

More related articles:

 US Binary Options Brokers
Trading binary options in USA has become a popular way to invest and grow your funds or to supplement an existing investment portfolio. It is exceptionally easy to start trading; you simply need a basic understanding of the principles behind each option. Th...
 Cyprus Binary Options
Binary options are a relatively new method of trading; it is one of the easiest ways for the average person to start trading on the stock market. It is also one of the cheapest; most brokers require as little as $200 to open an account, although some will allow you to start wi...
 Legit US Binary Options Brokers
When looking for a broker that accepts US traders, you have to consider these aspects: trustworthiness, wide range of binary options for trading (as well as deposit options),payout percentage and quick release of withdrawals and payments. From among the list of US binary opti...
 Recommended US Binary Options Brokers
If you're an US-based binary options trader is not so easy for you to find a trustworthy brokerage company since a majority of European brokers aren't accepted by strict regulation of your country of residence. However, times have changed and for now online trading is ...
 Reliable US Binary Options Brokers
There are a limited number of binary brokers who are licensed and approved to offer their services to US based traders. If you are based in the US and looking for one of the US binary options brokers then it is important to consider the track record of any brokerage. It is imp...
 Trusted US Binary Options Brokers
Trustfulness is the primary factor, which you should consider, when searching for the options operating website. Operating in all kinds of formats and options is not something innovative, thus it is necessary to search for professional brokers, which offer ...
TOPICS:  
Binary Option Auto Trading

 

TRADE WHILE YOU SLEEP!

SMART AUTOMATED TRADING SOFTWARE

 

100% Secure