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REX TRADING SIGNAL

Support and resistance as testable zones

Define a zone before price arrives, then plan for both a hold and a break.

Support and resistance describe areas where past price behavior suggests interest or congestion. They are observations, not barriers. Use a repeatable rule, such as a previous daily high or a cluster of swing points, instead of moving a line to fit the latest candle.

Write the zone width, the evidence required to act and what invalidates the idea. A breakout may continue or reverse. Account for spread and volatility when defining a trigger, and check the setup on examples you did not use to invent it.

Worked example

Your rule identifies yesterday’s high at 100 and a zone from 99.8 to 100.2. Decide in advance whether a close above 100.2 qualifies as a break and which timeframe supplies that close.

Check your understanding

Why is changing the zone after every losing example a problem?

Show explanation

It makes the rule impossible to evaluate fairly and can hide overfitting.

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