Support and resistance indicators

Support and resistance lines are effectively part of trend identification, but in this case, the market may be ranging – narrowly or widely – between certain price values. A line drawn through common upper prices is known as a "resistance" line, and the line through common lower prices is known as a "support" line.

The importance of support and resistance lines is that:

They identify upper and lower boundaries between which the price may range or "bounce" backwards and forwards. This feature allows traders to set stops just outside these values with some confidence,

They can signal the start of significant trends when prices break through either line. These are called "breakouts" and the strength of the break through the line is important to note for potential signals.

Support/Resistance Indicators Useful in Forex?
Average True Range (ATR) Yes
Bollinger Bands Yes
Commodity Selection Index No
Envelope EMA Yes
Envelope MMA Yes
Envelope WMA Yes
Keltner Channel Yes
Modified Keltner Channel Yes
Moving Average (variable) Yes
ODDS Probability Cones No
Relative Volatility Index Yes
Standard Deviation Yes
Standard Error Bands No
STARC Bands No
Volatility; Chakin's Yes
Volatility; Option No

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