Key Levels: The Support & Resistance Advantage
Master the art of identifying and trading the levels that truly matter
Support and resistance are the backbone of structured trading. Yet many traders fall into the trap of cluttering their charts with endless lines. While technically valid, most of these lines are not useful. Too many levels create hesitation, confusion, and poor decisions. The edge comes from clarity – keeping only the levels that matter.
Cutting Through the Clutter
If you’ve ever found yourself staring at a chart with lines everywhere, unsure which will hold or break, you know the problem. The solution is simple: for every line you draw, ask two questions – Would I initiate a trade here? Would I actively manage a trade here? If the answer is no, delete it. Every line must earn its place.
The Levels That Count
There are two main types of levels worth keeping. Entry levels are places to consider doing business, such as breakouts or reversals. Management levels are where you’ll scale, trim, or add to a trade. Anything outside these categories is clutter.
Within this, there are two tiers of importance. First-tier levels are universal, such as today’s open, yesterday’s high and low, yesterday’s close, and pre-news price levels around major events like NFP or earnings. These matter because the whole market is watching. Second-tier levels are contextual, such as intraday support or resistance zones, or higher-timeframe levels where buyers or sellers clearly stepped in.
Tools and Traps
VWAP is one of the most powerful dynamic levels, both as a session reference and when anchored to highs, lows, or news events. Sentiment often shifts around these anchors, making them institutional reference points worth tracking.
Trendlines, on the other hand, are a common trap. Small errors in angle create large errors in price, which makes them unreliable for decision-making. Horizontal levels, by contrast, are cleaner, clearer, and easier to test. Watching how price behaves around breaches — whether it’s a shallow fakeout or a sharp reversal — often provides excellent trade guidance.
Practical Rules for Clean Charts
To keep clarity, pre-mark your charts before the session. Only retain levels with a defined purpose, review and clean them weekly, and prioritise simplicity over completeness. Less clutter means faster decisions and greater confidence.
Final Thoughts
Levels are the foundation of structured trading, but not all levels are equal. Focus on the ones where you’ll actually act. Use universal levels for broad context, contextual levels for nuance, and VWAP for institutional insight. Avoid the trap of over-marking. Your job is not to map every possible line – it’s to trade the levels that matter.