Author: Maks aka ug
The Levels indicator is a powerful tool for traders using MetaTrader 5, based on the construction method outlined by Vladislav Antonov. If you've followed his session reviews on Viac or Alpari, you might be familiar with his techniques. To shed some light on this method, let’s dive in:
Support and resistance levels are fundamental concepts in trading, and while there are numerous ways to identify these price levels, I prefer my own calculations. This indicator defines dynamic support and resistance levels using moving average (MA) lines, while statistical lines are derived from higher timeframes.
How to Calculate Intraday Levels
Here’s how you can calculate these levels based on different timeframes:
- For one hour: Use the High, Low, and Close of the previous hour's candlestick.
- For one day: Use the High, Low, and Close of the previous day’s candlestick.
- For one week: Use the High, Low, and Close of the previous week’s candlestick.
In my reviews, I calculate support and resistance levels using the daily candlestick from the previous day. This way, the price levels remain valid throughout the current day, with recalculations needed for the next day. For instance, consider the daily candle from 02.11.06: High = 1.2786, Low = 1.2736, Close = 1.2780. These levels can be applied to all charts below the daily timeframe, with new levels recalculated the following day.
Methods of Calculation
There are three methods of calculation based on the size of the previous candlestick:
- Reduced: Ideal for weak market conditions. If the market closes with a large candlestick exceeding 200 points, this method helps anticipate corrections as the market may be sluggish.
- Normal: Suitable for medium volatility. This method works well when day candlesticks range from 100 to 200 points, especially during steady trends.
- Extended: Best for strong market movements. When market movement is confined to a triangle and appears weak, this method helps identify potential strong moves using levels with an extended price range.
Choosing the right method requires some personal research and an understanding of the level statistics. Personally, I don’t strictly adhere to the methods mentioned—I rely on my intuition and anticipated price patterns.
If you're keen to explore more, check out this link: http://www.viac.ru/ds/21950.
This indicator was initially developed in MQL4 and published in the Code Base at mql4.com on 24.02.2008.
Figure 1. The Levels indicator.
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