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Support and resistance are two aspects of trading that may be difficult to understand and identify for novice traders. You can increase your trading edge and have a clearer understanding of these important concepts by using our MTF Price Action Indicator.
In order to understand MTF price action you need to use smoothed price lines with almost no lag on each of the following time periods: 5, 15, 20, 30, 60, 120, 240, and daily. The interaction of these 8 different price action lines found in the MTF price action indicator is the key to identifying on your trading chart where and when a trade is changing directions.
Support is shown when price is headed down and gets stopped and goes back up. Support will be shown on the MTF indicator when the downward trending price is too far away from the daily line. When this happens commonly the price will start forming a consolidation or bottoming pattern and then reverse back up towards the daily trend line.
Resistance is shown when price is headed up and gets stopped and goes back down. Resistance will be shown on the MTF indicator when the upward trending price is too far away from the daily price line. When this happens commonly the price will start forming a consolidation or topping pattern and then reverse back down towards the daily line.
Whenever you see the fastest price action line change directions at any one of the 60, 120, 240 or daily price lines, this reaction is showing key points of support and resistance.
If you are trading on a fast time chart, anything from a 1 to 5 minute chart, and you see a consolidation pattern and are unsure about the future trade direction, you should look at the higher time frame price action lines to see their directional bias. These higher time period biases show the highest probable direction of the next price movement. If multiple higher time frame price action lines are all running in a given direction, then the odds are good that the 1 minute or the 5 minute chart will resolve any indecision by moving in that same direction.
Seeing the interaction of these MTF price action lines and seeing where these price action lines change direction will show the current price bouncing off of the 60 minute, 120 minute, 240 minute, and/or daily price action lines. When you see that happening you will become confident that is an important support and resistance area.
I know using the Multiple Time Frame Price Action Indicator in your trading will provides a great understanding of support and resistance and increase trading profits.
Watch the video named MTF Price Action Indicator - Reveals Support & Resistance:
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Next is Part 6 - "MTF Price Action Indicator - Secret to High Probability and High Profit Trading Setups".
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