Identifying market waves can be difficult on any market, especially with futures. However, the new ATR Support and Resistance helps to identify where the futures will seek to find support and resistance.
Identifying Market Waves on Futures
In this video, Gail Mercer, founder of TradersHelpDesk, shows how the new ATR Support and Resistance helps for identifying market waves. Basically the market will move up, then down to test for support to help move price upwards again. Or in a downtrend, the market will move down, then back up to test for resistance, which will push price further down. This action is what forms the “waves” that experienced traders often refer to but it can take years for new traders to recognize because it occurs on multiple timeframes.
The new ATR Support and Resistance indicator combines the ATR and congestion dots from our Trend ATR indicator and displays all three timeframe ATRs and CDs onto one chart. Whenever you have the blue and white ATRs and CDs split (meaning they are split above and below price) then you are probably better off trading ATM binary options. However, when the ATRs and CDs align in one particular direction, then wait for a retracement and then enter in the direction of the ATRs. This makes understanding multiple timeframes much easier.
Of course, it doesn’t replace the Trend ATR or any of the other indicators. It is simply another tool for traders to make a decision about entry or exit.