foundations · TRADING LEARNING GUIDE
A level is a zone, not a promise
What is this concept?
Support and resistance are areas of possible price reaction. Liquidity concerns the size and cost of execution. A chart line does not prove visible orders or guaranteed support.
Step by step
Choose zones from completed highs and lows; define their width beforehand. Separate touches, rejections and closes through the zone. Check spread, available depth and session conditions.
From observation to decision
Record the instrument, venue, session and timeframe. Classify the observation using the definition, then write at least one alternative interpretation. Decide what evidence would invalidate your idea before entry. Mark missing information explicitly. Examples are hypothetical. Collect paper observations, including failures. Include fees, spread, slippage and timestamp alignment when measuring outcomes. Recognizing a chart shape and establishing a profitable trading rule are separate tasks.
Worked example
For a 99–101 zone, a touch at 100.5 followed by a close at 102 differs from a close inside the zone. A close at 98 may invalidate a previously defined hold hypothesis.
Common mistakes and limits
Avoid exact-price certainty, assuming repeated touches always strengthen support or confusing a support zone with execution liquidity.
Practice
Track five zones and classify each touch as rejection, consolidation or break. Record spread and session without moving zones to fit winners.
Resources and further reading
These sources explain definitions and underlying mechanics. Worked examples are original illustrations; a source does not establish the profitability of a custom pattern.
Further reading / foundational context. Worked examples on this page are original illustrations, not source performance claims.
Further reading / foundational context. Worked examples on this page are original illustrations, not source performance claims.