Common SR Indicator
The Common SR indicator for MT4 is a support and resistance tool that highlights key trend reversal levels such as the previous trading period.
Description
The Common SR indicator for MT4 is a custom trading tool that identifies one of the major support and resistance zones of the price. It highlights key trend reversal levels, such as the previous high/low of the day, week, or month.
What is the best support/resistance indicator?
Different support and resistance indicators are used to analyze the market from a different perspective. For instance, a support and resistance tool like the Fibonacci is used to identify a potential reversal zone for trade entry/exit in a trending market.
So, there may be no such thing as the best support and resistance indicator. However, the Common SR indicator is still one of the best support and resistance tools in the financial trading market. This is because it highlights the critical levels where the market makers tend to reverse the price.
How To Trade With The Common SR Indicator
The above image depicts how the indicator would look on your MT4 chart. The indicator highlighted the previous highs and lows of the EURUSD pair in the H1 time frame.
The above image shows how the price reacted to the highlighted zone on a lower time frame of M15. The price rejections imply that the previous high may likely hold as a resistance zone, which in turn offers a potential sell opportunity.
So, essentially, you may open a sell/short position at the identified resistance zone (previous high) after price action shows multiple price rejections or a candlestick chart pattern like the bearish engulfing, inverted hammer, etc.
Furthermore, the above principle is also applicable to generating a buy/long trade setup and entry.
Conclusion
The Common SR indicator for MT4 is a suitable support/resistance tool for novice, intermediate and advanced forex traders. Moreover, scalpers are advised to set the indicator’s parameter to the previous day. Conversely, day/intraday and swing traders are advised to set it to the previous week or month. Finally, the indicator is free to download.