Defining floors and ceilings.
- Support: The floor where buyers step in to stop a fall.
- Resistance: The ceiling where sellers step in to stop a rise.
- Swing Levels: Previous highs and lows that the market remembers.
Zones vs Lines.
Too many traders draw thin lines and get frustrated when price wicks through them. Markets are not precise machines; they are driven by human emotion and liquidity. Draw your levels as 'zones' or 'areas' to account for volatility.
Focus on the 'meat' of the move—where the candle bodies closed—rather than just the extreme wicks.
Role Reversal: The flip.
One of the most powerful signals in trading is the S/R flip. When a strong resistance level is finally broken, the sellers who were defending it are often forced to buy back their positions, and new buyers enter at the 'discount.'
This creates a new floor at the old ceiling, providing a high-probability entry for trend continuation.
Avoiding the fake-out.
A common trap is buying a breakout immediately. Large institutions often push price just past a resistance level to trigger buy stops (liquidity), only to reverse the price sharply.
To protect your MixFunded evaluation, wait for a candle close above the zone or a successful retest of the level before committing capital. This avoids the rapid drawdown caused by 'bull traps' and 'bear traps.'