Support and resistance are the two most reliable indicators when you play trading platforms on the financial market. This indicator pair is proven to have the highest correct probability at Olymp Trade.
Not as high and complex as the usual indicators you know, support and resistance are extremely simple and accessible. And more importantly, it is the effective factor that this indicator pair brings.
What are support and resistance?
Horizontal lines from the bottom and the top area that the price created previously are called support and resistance. Specifically, the horizontal bottom line is support. The horizontal top line is resistance. And history has proved that when prices go to these areas, the probability of a rebound is relatively high. Probably due to the psychological factors of both sellers and buyers, but this is considered an important behavior of price.
There is no point or a specific support/resistance price. It is understood as the level or the threshold. Therefore, the support/resistance indicator pair is determined by the trader’s feeling, skill, and experience. If you do well, this will become the most effective way to trade at Olymp Trade.
How to set up support and resistance levels in Olymp Trade
At the indicator tab on Olymp Trade interface, you move down near the bottom. Click Horizontal line. A pink dashed line will appear. You place this dashed line at the old top or bottom area where the price has passed. Thus, you will get a horizontal line creating support or resistance
At Olymp Trade, you can create lots of pink lines like that. This helps you see more clearly the strong support and resistance when trading.
Notes when using support and resistance on Olymp Trade
A straight line that goes through many bottom areas is called a strong support. On the contrary, a straight line that crosses many top areas will be called a strong resistance. The stronger support and resistance levels are, the more reliable the price action is.
The price is constantly changing. Therefore, it will often create different support and resistance levels. And the new support/resistance level will be less reliable than the strong support/resistance level.
Special note when the price hit hard to overcome the support/resistance level (break out).
For example: If the price breaks out the support level, this resistance level will become the support level. And vice versa.
The method of trading with support and resistance indicators at Olymp Trade
Because the probability of the price when enters a support or resistance level tends to reverse, this is also the area where you should focus and be able to open a trade.
Open an UP trade if the price enters the support level. You can open a long or short trade depending on how you feel
Open a DOWN trade when the price enters the resistance level.