Support and Resistance as Price Zones
Support and resistance are areas where price has previously paused or changed direction. They are descriptive reference zones, not guaranteed floors, ceilings or evidence of unfilled institutional orders.
How it works
Choose a rule before examining later candles: for example, use the previous 20 completed sessions’ swing area and a tolerance of 0.5 times recent ATR. Count independent visits, distinguish closes from wicks and record when each zone became observable. A wide zone can fit almost any historical move, so its width must be justified.
Worked example
A prior swing low is 50 and ATR is 2. A study using a ±0.5 ATR tolerance marks 49–51. A later close at 48.8 is outside the zone; a wick at 49.5 is inside. If your predefined rule requires a close below 49, record the close as a breach rather than moving the zone after seeing it. This is a chart classification exercise, not a buy or sell recommendation.
Amounts, prices and scenarios are fictional teaching examples. They exclude any effects not explicitly stated and are not trade recommendations.
Limits and common mistakes
Repeated tests can precede either a bounce or a break. Gaps can jump across the whole area, and a stop order may fill beyond it. A level that worked in one sample has no demonstrated predictive probability without a consistent test.
Knowledge check
Why specify zone width before studying outcomes?
Read the explanation
Otherwise the analyst can expand or move the zone to count failures as successes, making the historical result impossible to reproduce honestly.
References and further reading
These sources explain the underlying concepts and specifications. They do not endorse QBMFX Academy. Check the relevant market, protocol version and reporting rules before applying an example.