Overview
Support and resistance are zones, not exact prices. The strategy is to plan entries where price has repeatedly reacted and let the level define the risk.
How it works
Mark levels from prior sessions, wait for price to reach them, and require a reaction before entering. The stop sits beyond the zone.
Typical setup
- Level tested at least twice
- Reaction candle inside the zone
- Stop beyond the zone, not at it
Advantages
- Simple to learn
- Naturally defines risk
- Works on any timeframe
Risks
- Levels break more often than beginners expect
- Zone edges are subjective
Common mistakes
- Drawing levels to fit a bias
- Placing stops at the obvious round number
Risk management notes
Give the zone room and accept that a broken level often becomes the opposite level.
This guide is educational. It is not a signal service, a recommendation, or a claim that this strategy is profitable. Trading involves substantial risk of loss.