Support Resistance Using Averages AFL

APIBridge, Amibroker 

This tutorial shows how Support Resistance Using Averages AFL can be used on charts of Amibroker to Trade 

 
Strategy Premise 

In most simple terms, support is defined at the price level from which market bounces up while resistance is the price level from which market goes down. 

When prices bounce from the 20-period MA, we take that point as support level. When prices fall after touching 20-period MA, we that that price as resistance level. This is because most people use Moving Average Crossover for analysis/trading. 

When the market is trending, we buy on the break of resistance. But when the market is sideways, we do not enter a trade at all. Plus Directional Index (PDI) and Minus Directional Index (MDI) indicators are used to determine whether or not the market is trending. 

Strategy Logic 

Buy: When prices go above short-term resistance and PDI is above 30. 

Sell:  When prices go below short-term support. 

Amibroker Settings 

Step 1: Make sure you have completed Jump Start setup 

Step 2: Download AFL from here. In Amibroker, Go to Formula editor and paste the AFL here.   

Step 3: Add Separate Entry Exit Automation AFL after strategy AFL and hit Apply. 

Step 4: Right Click on the chart and go Parameters to adjust the inputs of the strategy.