Support and resistance using forex indicators

There are in fact two ways we can view support and resistance, one is based on price and the other on volume. We are all familiar with price-based support and resistance which is a key plank of technical analysis, but we can also use volume in the same way. The volume point of control for NinjaTrader presents the volume profile on the price chart. In other words, we have introduced time to the price and volume relationship and so when presents volume as a histogram of low and high volume nodes. So what this gives us a visual picture based on the volume of where the price action is likely to congest as it approaches these regions, and where it is likely to pass through swiftly. Where we have a low volume region we can expect the latter since there is no volume congestion of old orders waiting to be triggered, whereas when we approach a high volume area, the opposite is true. Here we have traders trapped in weak positions and a host of other orders waiting to the executed. Using support and resistance from both a price and volume perspective is a powerful way to apply this powerful principle but in a new way.

About Anna 2016 Articles
Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

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