Futures, FX, Technical Analysis, Trading Education, Trading Tools

Support and Resistance levels – trade with ease

Support and resistance levels - place an order

How can one know when is the perfect time to buy and sell any market? What key indicators signal its time to make a decision? No one knows. The support and resistance feature helps traders answer these questions. Simply put, an area of support is where the price of an asset tends to stop falling (more demand), and an area of resistance is where the price tends to stop rising (more supply). There are different types of support and resistance, including minor and major/strong.  

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BetterTrader utilizes artificial intelligence to calculate support and resistance levels based on different levels that help traders make decisions.

One example of a commodity that exhibits the impact of support resistance levels is Natural Gas, which can be complicated to navigate.

The Problem:

Support and resistance levels are important indications for traders to know when it is a good time to buy and sell. The Support and Resistance feature in the BetterTrader news platform finds the resistance level recent top – which the market has not broken through – and a support level recent bottom – which the market has not fallen below recently. These levels, however, are constantly changing and oftentimes need to be manually recalculated several times throughout a given time span. 

Automation for Support and Resistance levels

Better Trader’s support and resistance levels are calculated multiple times throughout a given day and are calculated depending on the time frame the trader is looking at. For traders looking into natural gas, for example, having automatically generated up-to-date support and resistance levels can help them develop a strategy about where to place buy and sell limit orders. At the support level, someone would take a long position–buying commodities with the expectation that the market will rise in the future– in natural features. Alternatively, at the resistance level, they would take a short position–selling commodities with the expectation that they decrease in value in the future–on natural gas. These support and resistance features make it easier for traders to understand when to go long or short.

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The Results

With the support and resistance analysis, you can understand where the supply and demand have been and see real-time updates. The feature shows you not to go long at resistance and not to go too short at support. 

Traders that used the S/R for Natural gas:

  • Gained an understanding of the previous demand and supply areas.
  • Have an easier position in setting a profit and stop loss targets.

In summation, support and resistance are very important concepts that one should learn in order to be a successful trader. The BetterTrader voice assistant will also let you know when the market is getting closer to support levels.

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