Best Indicator for Support & Resistance Analysis in Gold XAUUSD Trading
- VasilyTrader
- 11 minutes ago
- 2 min read
I will show you the best and free indicator that will help you do support and resistance analysis on Gold on any time frame.
If you are a beginner in Gold XAUUSD trading, this technical indicator will help you a lot in market structure analysis, whether you are using TradingView, MT4/MT5.
How to Find Supports & Resistances
We will use a classic, default technical indicator that is available in any trading terminal.
It is called Zig-Zag.
To add it to your chart on TradingView, simply search for it in the indicators window.
This indicator maps significant historical highs and lows, which are the ultimate base for supports and resistances.
However, with the default settings of the indicator, it is less sensitive and may miss significant highs and lows, especially if you analyse lower time frames.
Choose Proper Settings
To set the indicator up properly, find the smallest recognizable price action leg on a price chart and measure its length as a percentage.
In our example, there is one important impulse leg that the indicator misses.
This movement has 4.04% length.
Open the settings of the indicator and find "Price deviation for reversals (%)" in inputs.
Input 4.04 number to make the indicator more sensitive.
Now, the indicator starts recognizing this movement.
How to Use the Indicator
The highs and lows that the indicator maps are key levels.
Mark them with horizontal lines.
After that, draw support and resistance zones based on these key levels.
Just pick the candle that comprises a key level.
Among its closing and opening levels, choose the closest one to a key level and draw the zones.
And the final step is to remove past supports and resistances that Gold XAUUSD price stopped respecting.
That's how a complete analysis looks.
Summary
You can use ZigZag indicator for support and resistance analysis on Gold on any time frame for scalping, swing trading, or day trading; you just need to change the settings.
If you have just started Gold trading, support and resistance analysis may appear complicated to you.
This method will help you never miss important supports and resistances when trading Gold XAUUSD.
