The indicator for plotting support - resistance zones.
It displays the zones of the current and higher timeframes on the current timeframe, thus determining the strongest resistance zones. The practical difference from the support - resistance lines is that the price never reaches the resistance lines point to point. Often, those are the struggle areas and the price can move either up or down, breaking the resistance line, but in fact, moving within certain boundaries. These boundaries are the support - resistance zones.
Strategy for trading using the support - resistance zones:
- Zone breakout
- Zone rebound
If the resistance zone in on a trending part of the market, the probability of such zone being broken is higher. Therefore, place a pending Buy Stop order for a bullish market or Sell Stop order for a bearish market at the upper border of the zone.
If there is a flat market, the probability of a rebound from the zone is higher. Therefore, place a pending Sell Limit order at the lower border of the resistance zone for a bullish movement, and a pending Buy Limit order at the upper border of the support zone for a bearish movement.