Overview
Most of the chart is the middle of a range. This approach trades only at the edges, where risk can be placed beyond a well-tested level.
Objectives
- Trade only at tested levels
- Keep stops beyond the zone
Suitable market conditions
- Level tested at least twice
- Ranging or slowing market
Tools and indicators
- Support and resistance zones
- Candlestick patterns
Market bias
Neutral inside ranges; with the trend at trend levels.
Entry rules
- Wait for price to reach the zone
- Enter on a rejection candle close
Confirmation
- Pin bar or engulfing candle
- Lower-timeframe structure shift
Stop loss and take profit
- Stop beyond the zone
- Target the middle or opposite side of the range
Risk management
- Fixed risk
- No entries mid-range
Valid example
Daily support tested twice before. Price returns, prints a bullish engulfing on H1. Entry with the stop below the zone.
Invalid example
Price slices through the zone with full-bodied candles. Stand aside.
Common mistakes
- Too many levels
- Expecting exact reactions
Advantages
- Simple to learn
- Works on any instrument
Limitations
- Levels break in strong trends
No strategy guarantees profit or a particular win rate. Test any approach on a demo account and size every trade from a fixed risk.