📊 Support & Resistance: It’s Not a Line, It’s a War Zone

If you treat Support and Resistance as thin pencil lines on your chart, you will lose money. The market isn’t that precise.

Banks don’t place all their orders at exactly 1.05000. They spread them out from 1.0490 to 1.0510. This creates a Zone—a battlefield where buyers and sellers clash.

RelicusRoad Pro automates this by identifying these Institutional Zones for you, coloring them by strength so you know exactly where the next battle will likely be fought.

The “Zone” Philosophy (Why Lines Fail)

The Liquidity Trap

Retail traders put their stop losses just behind the “Line.” Institutions know this. They will often push price through the line to trigger those stops (liquidity), fill their own massive orders, and then reverse the price.

The Solution: Stop trading the line. Trade the Zone. By visualizing a 10-20 pip area, you won’t get panic-stopped out by a wick. You will see it for what it is: a Liquidity Grab.

The RelicusRoad Hierarchy

Not all zones are worth your money. We classify them into three tiers:

🔴 Major Zones (Red)

The “Fortress”

• Timeframe: Weekly / Daily.
• Behavior: Price often bounces hard here. It takes massive volume to break these.
• Strategy: Look for major reversal trades.

🟠 Intermediate Zones (Orange)

The “Stepping Stone”

• Timeframe: 4-Hour / 1-Hour.
• Behavior: Price respects these during a healthy trend.
• Strategy: Perfect for “Pullback” entries in a trend.

🟡 Minor Zones (Yellow)

The “Speed Bump”

• Timeframe: 15-Minute / 5-Minute.
• Behavior: Price pauses here but breaks easily.
• Strategy: Good for scalping targets, but don’t trust them for stops.

3 Strategies to Master the Zones

Strategy 1: The “Role Reversal” (Trend Continuation)

This is the bread and butter of professional traders. “What was once the ceiling becomes the floor.”

1. Identify: Price smashes through a Resistance Zone.
2. Wait: Do not chase. Wait for price to come back down to test that same zone.
3. Confirm: The old Resistance is now Support. Look for a bullish wick rejection.
4. Enter: Buy the bounce.

Strategy 2: The “Fakeout Trap” (Range Trading)

Best used when the market is sideways.

1. Identify: Price is stuck between a Red Support and a Red Resistance.
2. Watch the Edge: Price pierces the top Resistance line.
3. The Trap: Instead of continuing up, price slams back down into the zone.
4. Enter: Short immediately. The breakout traders are trapped, and their panic selling will drive price down to the Support zone.

Strategy 3: The “Fresh Zone” (Supply & Demand)

The first touch is the deepest.

• Concept: A zone that hasn’t been touched in a long time often holds a stack of unfilled institutional orders.
• The Trade: Place a limit order at a “Virgin” Red Zone. The first bounce is usually sharp and profitable.
• Warning: The more times a zone is hit, the weaker it gets (like a hammer hitting a wall). Be careful on the 3rd or 4th test.

Risk Management: Surviving the Zone

The “ATR Buffer” Rule

Never place your stop loss exactly at the edge of the zone. Rule: Calculate the ATR (Average True Range) and add 50% of the ATR to your stop distance. This gives your trade “breathing room” to survive the institutional wicks.

Position Sizing

• Trading a Red Zone? Full risk (e.g., 1-2%).
• Trading a Yellow Zone? Half risk (e.g., 0.5%). The probability is lower, so your risk should be too.

Common Mistakes

1. Thinking “It Has to Hold”: No zone is unbreakable. If a Red Zone breaks, don’t argue with the market. Reverse your bias.
2. Trading Every Line: A chart with 50 lines is useless. Focus only on the Red and Orange zones that are closest to the current price.
3. Ignoring Time of Day: A Support Zone is much more likely to break during the London Open (high volume) than during the Asian lunch break.

Conclusion

Support and Resistance isn’t about predicting the future; it’s about knowing where the odds are in your favor.

RelicusRoad Pro handles the heavy lifting of drawing and classifying these zones so you can focus on the execution. Stop guessing where the lines are and start trading the institutional map.

Ready to see the zones? Get RelicusRoad Pro and trade with clarity.