BirbicatorPRO contains several methods for deducing significant price levels that can be used to plan and execute trading decisions. There are three systems operating simultaneously to provide the user with varying types of suggested support and resistance levels.
Auto Price Level System
Short Range Price Level Lines
Percentage Price Oscillator (PPO) Range - High Breaker, Mean and Low Breaker levels provide short term price channel.
Long Range Price Level Lines
BirbicatorPRO Band Extended Range - Extended Percent Price Deviation Range Targets for planning trade targets beyond PPO short range price levels.
BirbWAP (Average VWAP) Line
Proprietary Volume-Weighted-Average-Price (VWAP) which denotes immediate (short-term) support and resistance based on the average of the Birbicator VWAP Trends.
Short Range Price Levels Lines are presented as two "thick" (High/Low Breakers) , and one dashed (Mean) horizontal levels to the right of the price chart. The levels presented as based on proprietary calculations generated from the Percentage Price Oscillator (PPO), which provides a technical momentum indicator that shows the relationship between two moving averages in percentage terms. More information on the base PPO indicator can be found here.
The High and and Low "Breaker" levels represent key levels of resistance and support for the price of an asset. Using the methodology of mean reversion we assume the price channel created by the PPO indicator provides extremes of the market that act support and resistance and also significant levels associated with breakouts and breakdowns from the defined channel.
Long Range Price Level Lines represent extensions of BirbicatorPRO's standard price deviation band which present higher extremes of the bands as horizontal price targets. These level lines are assumed to be used in confluence with other signals and components of BirbicatorPRO and can be used as extended price targets for planning and executing trading decisions.
As we can see in the example above, Long Range Price Level Lines are presented to the right of the assets current price action, and are denoted by three lines on each side of the mean (S1, S2, S3, R1, R2, R3). Akin to Fibonacci retracement levels, the BirbicatorPRO's Long Range Price Levels represent significant extreme targets on either side of the mean which should be respected given adequate momentum above or below the Short Range Price Levels. In this way, a user may think of the Short Term Price Levels as the "channel" for which price is moving, while the Long Term Price Levels as the "Targets" (e.g., support and resistance) where price has a higher probability of reacting in the opposing direction of the momentum presented by the primary components of BirbicatorPRO.
Going along with the theme of customization ingrained within BirbicatorPRO, the user has the option to selectively enable both price labels and price lines associated with Short and Long Term Price Levels.
BirbWAP (Average VWAP) Line
BirbicatorPRO integrates the use of Volume-Weighted-Average-Price (VWAP) within the system to provide yet another way to deduce the current price trend against a volume weighted moving average that is anchored to the overall BirbicatorPRO system. More information on this system is covered within the "BirbWAP (VWAP Trends)" Section.
While the BirbWAP is comprised on three separate and distinct VWAPs, there is a 3rd type of level line presented within the Birbicator to continually provide analysis to the user for where price is with respect to the volume weighted average of BirbWAP. To accomplish this in a concise manner, the average of the three components of the BirbWAP are presented as a "trailing line" which is always present as a short "dotted" line.
The BirbWAP is timeframe and Trend Mode sensitive, which will change the value presented by BirbicatorPRO. In a trending a market on higher timeframes, the BirbWAP may lag significantly behind the current price, which indicates that the BirbWAP may be used as a support and resistance target, rather than an immediate momentum indicator. For low timeframe, or within channeling markets, the BirbWAP can be used to denote bullish/bearish bias for price action, as well as another level to confirm or renounce breakout/breakdown events.