Discussing the article: "Mastering Market Dynamics: Creating a Support and Resistance Strategy Expert Advisor (EA)"
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Check out the new article: Mastering Market Dynamics: Creating a Support and Resistance Strategy Expert Advisor (EA).
A comprehensive guide to developing an automated trading algorithm based on the Support and Resistance strategy. Detailed information on all aspects of creating an expert advisor in MQL5 and testing it in MetaTrader 5 – from analyzing price range behaviors to risk management.
The description of the Support and Resistance strategy revolves around its application in trading scenarios. Support levels typically indicate a lower boundary that the price struggles to break through, suggesting a concentration of demand, while resistance levels represent an upper boundary indicative of a concentration of supply. Buyers typically enter the market at support levels, and prices are likely to rise, therefore it is a good time for traders to think about buying or going long. On the other hand, sellers enter the mix at resistance levels, and prices may drop, allowing traders to sell or go short. Here is a visualization of what we mean.
Market entry is always dynamic and depends on one's taste and preference, though there are two basic ways of trading the levels. Some traders prefer to trade the bounce by buying when the price falls towards support levels and selling when the price rises towards resistance levels. Conversely, other traders prefer to trade the break by buying when the price breaks up through resistance levels and selling when the price breaks down through support levels. Hence, one can either Fade the Break or Trade the Break.
Author: Allan Munene Mutiiria