Playbooks

What it is

Support and resistance are price areas where buying or selling has repeatedly stepped in. Treat them as zones, not exact lines: a level is as wide as the noise around it (about a quarter to half of the ATR).

What to look for

• Repeated reactions. Two or three clean touches on the same area, on the timeframe being analysed or the one above it.
• Swing highs and lows that price left sharply, and round numbers that the market keeps respecting.
• Previous day, week and month highs and lows.
• Role reversal. Broken resistance that is retested from above becomes support, and the reverse.
• Freshness. A level touched four or more times is usually weakening: each touch uses up the orders resting there.

How to mark it

• level for each key price, labelled with the side and the reason (R 87.2k, 3 touches).
• zone kind range when the reaction area is wide: from the wick extreme to the body edge.
• marker on the touches, breakouts and retests that justify the level.
• trendline for a sloped support/resistance or a channel edge.
• Keep it to the two or three levels on each side of price that matter now.

Scenario logic (analysis, not advice)

• Bounce: price reaches a level with a reaction candle (rejection wick, engulfing). Stop reference just beyond the level, about half to one ATR. Target the next level.
• Breakout and retest: a decisive close beyond a level, then a retest that holds. Stop reference back inside the broken zone. Target the next level in the direction of the break.
• Failed breakout: a wick beyond the level that closes back inside is a trap signal; the opposite side of the range becomes the target.
• Give the reward-to-risk; skip scenarios under 2:1.

Invalidation

A close beyond the zone by more than about an ATR, or two consecutive closes through it, ends the level's role. Say which level, and which close, would change the read.

Pitfalls

More lines is not more information. Do not draw a level with a single touch unless it is a previous-period high or low, and say so in the label.