Support & Resistance

Key idea

Support and resistance are zones where price has previously reversed or paused with enough participation to matter — not a single exact price. Drawing them as thin lines and expecting a reaction to the tick invites disappointment; drawing them as zones built from multiple touches is far more robust.

How to apply it

• Mark zones around clusters of prior highs/lows and wicks, not one candle's exact close.
• Weight a level by how many times price reacted there and how much volume/participation accompanied those reactions.
• Expect the first test of a fresh level to be the strongest; each retest weakens it.
• Combine with higher-timeframe levels — confluence between timeframes matters more than a single-timeframe level.

Example

A stock reacts three separate times near 148-150 with long wicks and elevated volume. That's a real resistance zone; a single spike to exactly 149.80 six months ago, with no other reaction, is not.

Checklist

• I drew a zone, not a single-price line
• The level has at least 2 prior reactions with visible participation
• I checked whether a higher-timeframe level overlaps
• I know this level will likely weaken after repeated tests

Common mistakes

• Drawing a level from a single wick with no other confirmation
• Expecting exact-tick reactions instead of zone behaviour
• Ignoring how many times a level has already been tested
• Redrawing levels after the fact to fit what happened