Critical
Points is a handy
VertexFX client side VTL indicator for support and resistance levels and
trading ranges based on the trend and price movements.
Critical Points indicator
identifies the multiple support and resitance levels that are critical for
trading, especially for placing stop-loss and profit target. The concept behind
the indicator is that prices exhibit certain critial price levels where an existing
trend exhausts, or reverses.
These levels are identified using Fibonacci
series, and the levels below the current price form Support and the levels
above the current price form Resistance. When trading LONG positions, supports
can be used as stop-loss levels, and resistances can be used as target levels.
Likewise, when trading SHORT positions, supports can be used as target levels,
and the resistances can be used as stop-loss levels.
In the first step we calculate the
Moving Average of the specified MA_TYPE and MA_PERIOD. In the next step we
calculate the 8 Fibonacci levels above and below the Moving Average based on
FIBO_1, FIBO_2, FIBO_3, FIBO_4, FIBO_5, FIBO_6, FIBO_7 and FIBO_8 distances
provided by the user.
These levels are termed as Critical
Points, as price exhibits support and resistance at these levels. For example,
the immediate Support is the FIBO_1 level below, and the immediate Resistance
is FIBO_1 level above.
When the FIBO_1 level is breached from above, that is the support is broken, it now becomes the resistance and the FIBO_2 below becomes the new support.
When the FIBO_1 level is breached from above, that is the support is broken, it now becomes the resistance and the FIBO_2 below becomes the new support.
These Fibonacci levels are used to
determine nearest support and resistances and place stop-losses or entry levels
accordingly. In sideways markets, price bounces of support and falls down from
resistances. When the support or resistance is broken with strong volume, it
indicators the start of a new trend direction.
Note: This
indicator does not provide Buy or Sell signals.
Note: It is preferred
to use this indicator with H4 time frame
To use Critical Points indicator download it from here, then place it at
VertexFX VTL directory:
C:\ProgramData\VertexFX Client Terminals\"Company name"\VTL10\Local VTL Scripts
C:\ProgramData\VertexFX Client Terminals\"Company name"\VTL10\Local VTL Scripts
Then right click on the tree and select refresh or
restart your client station and you will find under VTL local scripts in your client terminal.
You can check this video that talks about Critical
Points indicator: