Support - Resistance

The Support - Resistance indicator allows for the graphical display of pivot prices for an instrument, which generally correspond to horizontal resistance and support levels.

Instead of presenting volumes traded day after day, this indicator accumulates them by price level over the chosen historical period. The volumes then appear in the form of a horizontal histogram, layered along the vertical price scale, highlighting the price levels corresponding to the maximum volumes traded. These maximum levels are called pivot prices.

In Axial Finance, the historical period considered for accumulating volumes is that chosen for the displayed chart, taking into account the position of the sliding zoom when enabled. The number of price levels used to perform the volume accumulation is programmable. Generally, about fifty different levels (or calculation "steps"), between the maximum and minimum graduations of the price scale, are selected.

Example

Interpretation

Pivot prices correspond to the prices for which the volumes were the highest since the beginning of the instrument's historical data. Given their weight, these pivot prices are similar to resistance or support levels.

When a pivot price is crossed upwards or downwards, a new trend emerges. Depending on the chosen historical duration, the trend will correspond to short, medium, or long term.

Remarks

Upon crossing a pivot price, it is prudent to correlate the signal with another trend indicator.