Annoying, isn’t it?
You identify and draw what looks like a strong resistance level, wait patiently for price to return, and expect a reversal.
But instead of turning at your level, price pushes a few pips higher before reversing.
Or perhaps you’ve identified a strong support level, only for price to come close, miss it by a few pips, and reverse before giving you the entry signal you were waiting for.
Another opportunity gone.
Sound familiar?
This is one of the biggest frustrations traders experience when using traditional support and resistance levels.
And it raises an important question:
If price regularly reverses around these levels rather than exactly at them, why are we drawing them as single lines in the first place?
The Problem With Support and Resistance Levels
Support and resistance have been a staple of forex trading for decades. Traders around the world use these levels to identify areas where price may potentially reverse.
And there’s a good reason for that.
They can be incredibly useful.
But after spending years using support and resistance levels myself, there were a few things that always bothered me.
Things like:
- Price reversing before reaching the level.
- Price pushing through the level before reversing.
- Entry signals forming a few pips above or below the level.
- The subjectivity involved in deciding exactly where to draw the line.
- Two traders identifying the same area but drawing their levels in completely different places.
These problems can make trading support and resistance unnecessarily difficult.
You can identify what appears to be a perfect level, wait for price to return, and still miss the trade simply because price didn’t interact with your line precisely enough.
And that’s the problem.
The market doesn’t move in perfectly defined lines.
So why should we expect our support and resistance to?
The Solution: Use Zones Instead of Lines
What if, instead of drawing support and resistance as a single line, you treated them as an area where price is likely to react?
That’s exactly what we’re going to look at in this lesson.
The answer is simple: use support and resistance zones instead of traditional levels.
Yes, really.
It might seem like a small change, but thinking in terms of zones rather than precise lines can completely change the way you approach support and resistance.
A zone gives price room to move.
Instead of requiring price to touch one exact price level before you consider the area valid, you can identify a broader region where buying or selling pressure has previously caused price to react.
This can help solve many of the frustrations associated with traditional support and resistance levels.
In today’s lesson, I’ll explain why support and resistance zones can be more practical than single-price levels, show you how to identify them, and break down how you can use them in your own trading.
So, if you’re tired of watching price miss your support or resistance level by a few pips and reverse without you, this lesson is for you.
Let’s get started.
Why Support And Resistance Zones Are Better Than levels
So, you’re probably wondering…
Why are support and resistance zones better than levels?
What, if any, advantages do zones provide over levels?
Aren’t support and resistance levels fine as they are?
To that last point… NO, they aren’t!
And here’s why:
Support and resistance levels come with a host of unfixable problems that degrade the accuracy and validity of the levels – problems I’m sure many of you have encountered in your own trading.
I mean, tell me…
How many times have you seen price miss a support or resistance level but reverse a few pips later without producing a signal?
Happens all the time, right?
And, let’s not forget…
- The subjective nature of identifying/drawing the levels.
- Seeing price fail to produce an entry signal on the level itself.
- Not knowing where to place a stop when price hits a level.
… see the problems now?
But here’s the important point: These issues all stem from two fundamental problems that come from drawing support and resistance as lines/levels.
What are they? Read on…
#1: Lines Are Subjective
What’s the biggest problem you face using support and resistance?
Probably: Drawing the correct levels, right?
Wanna know why?
Here’s the answer: Because lines make identifying the right swing highs and lows for drawing support and resistance levels highly subjective.
Lines deduce a set of a data points into a singular point of reference.
“Data points, what are those?”
In our case, it’s previous swing highs and lows.
You draw the level according to prior swing highs/lows that formed at similar prices. But not all highs/lows form in-line with one another. Some form outside the range of the line, which makes drawing the correct level difficult and subjective.
For example…
The above support level intersects five swing lows that formed at similar prices, but three other nearby lows were excluded as they didn’t fit the line.
So… is this support level correct?
Well, who knows!
Lets find out…
Look familar?
Price misses the level, produces a bull pin bar just below, before reversing. The result? You miss the entry because the level didn’t include the correct lows.
Many traders would blame themselves here…
“Doh! I’ve drawn the line wrong again”. Or,
“I must have missed the right lows”
However, the real fault lies with levels being lines. That’s what makes them subjective! Think about it… A tiny line CANNOT include every swing low. You must pick and choose which lows to include, which make idenfitiyng and drawing the correct levels highly subjective.
So, how do we fix this?
(Hint: Read the title again)
Before we get to using support and resistance zones, though, let’s look at the other fundamental problem with the levels.
#2: Lines Increases Randomness
It’s true!
Drawing support and resistance levels as lines adds randomess to how price interacts with the levels, for one reason: Lines are tiny, duh!
It’s not rocket science, just plain old line size.
Using lines, you expect…
- Price to reach a single point (possible).
- Price to reverse upon hitting a single price (unlikely).
- Price to produce a pattern at a single price before reversing (Get the point?).
What are the chances? Not very high…
The probabaility price will return to a single price (the S&R level), produce a pattern exactly at that price, then reverse with only minor fluctuations are unbeleivably low!! It’s like trying to hit a bullseye that re-positions after each shot!
And why does this happen?
Simple: Because support and resistance level form as tiny line.
Think about it like this…
What catches more fish; a large fishing net or a fishing rod?
The net, right?
Well, support and resistance levels are like using a fishing rod to catch lots of fish. Sure, the odd catch comes every now and again, but most fish avoid the line. With a wide net, that’s not the case; catches come quick and fast due to the size.
See what I mean now?
That’s the key difference:
- S&R Zones = Using a large net to catch lots of fish (trades!)
- S&R Levels = Using a rod to (maybe) catch one fish occiaosnally.
Why Support And Resistance Zones Are Better
By now, I hope it’s clear:
All the annoying issues you probably have with support and resistance… stem from the levels themselves being tiny horizontal lines.
From…
- Drawing subjective levels,
- Reversals missing the level,
- Missing entry signals,
It’s all comes from the same issue – drawing the levels as lines!
So, what’s the fix?
Well, it’s simple: Use zones isntead of lines.
Zones encompass a far bigger area than lines, allowing you to inlcude more swing lows/highs. That makes the levels more accurate and easier to trade. Entry signals also become more consistent, since the zone increases the chance a signal will form inside.
For instance, check the example below…
This support level, which I showed earlier, failed because the line didn’t include the correct lows, which led to the entry signal (the pin bar) appearing below the line.
Not good! But watch
See the difference?
Even though the pin didn’t touch the line, it still formed inside the zone.
Converting support and resistanace levels to zones removes 95% issues created by the levels being lines, making S&R far more consistnent to both draw and trade.
Zones bring two key advantages over levels:
#1: More Highs/Lows Are Included
Support and resistance levels are subjective because it’s impossible to know which highs/lows the line should include/exclude.
Zones removes this problem entirly.
The zone
#2: The Bigger Area Decreases Randomness
Drawing support and resistance as zones rather than lines provides two key advantages: #1 More highs/lows are included, creating a wider net to catch price, and #2: the increased area decreases the randomess and subjectivity the lines create.
Here’s the previous example again, only this time, I’ve marked the support level using a zone instead of a line.
How To Identify Support And Resistance Zones Step By Step
Identifiyng support and resistance zones follows the same process as finding S&R levels: You find the levels, mark them on the chart, then draw a zone ontop.
But I don’t know how to find levels?
Can’t find the levels? No problem.
Here’s a quick guide on what to do…
Step 1: Locate Highs Or Lows At Similar Prices
You know how S&R levels form, right?
It’s simple: highs and lows – that’s all you need!
Support and resistance levels form when two or more (the more the better) signifcant lows or highs develop at similar prices.
- Support levels = look for lows at similar prices.
- Resistance levels = look for highs at similar prices.
Make sense?
Here’s a quick example…
The image above shows 5 swing lows all form within a few pips of the same price, telling us traders have consistently rejected these lower prices.
Therefore: a support level exists here.
Simple, right?
Here’s a resistance example…
On the chart above, 5 promintate swing highs all appear around the same price – a sign traders have recjected these high prices multiple times.
So, a support level appears here.
Onto marking the levels now…
Top Tip: Can’t find the swing lows/highs? Use a line chart! Line charts remove unesscary noise from a chart, making the lows and highs easier to see. Just remember to switch back to a candlestick chart to adjust the line using the high/low wicks.
Step 2: Place A Line Through The Highs/Lows
Found your swing highs or lows?
Good job!
Now it’s time to mark the support or resitance level using a line. The key point to remember here: ensure the line strikes through as many highs/lows as possible.
Here’s my process:
- Place the line around the lows/highs.
- Adjust the line to cover as many highs/lows as possible.
- Make any minor adjustments (can be subjective).
Let’s look at some examples…
See what I mean now – the line includes some swing lows but misses others.
Simple, right?
Notice, too, that the lows included all roughly line up at the same spot. The others form either a few pips above or below the line, to fit with the line.
Follow the same guidelines drawing your own support lines!
Key Point: Use the candle wicks as a basis for which highs (or lows, in this case) to include when drawing the line. The entire wick indicates a low or high – not just the tip! Fit the line according to which swing lows/high strike through the most wicks.
Here’s a quick resistance example…
It’s the same again – the resistance line includes all the signifcant swing highs, striking through all the highs that appear at similiar prices.
Some at the wick, others right at candle tip.
Step 3: Make Small Adjustments
Finally: Double check your lines… Do they really fit?
You don’t need 100% accurate lines for support and resistance zones – the zone will compensate in most cases – but the line should fit the incluced highs and lows. Ask yourself: does the line include the most lows/highs while still near the others?
If YES – move onto drawing the S&R zone.
If NO – Adjust the line until the highs/lows fit.
Usually, the line will be fine…
BUT, always double check to make sure.
Onto drawing the zones now…
Drawing Support And Resistance Zones
There’s a right way and a wrong way to draw support and resistance zones:
- The wrong way – slap a zone any old way over a level.
- The right way – draw the zone according set pip sizes.
Support and resistance zones must always follow certain pip sizes; otherwise, the zone won’t sit in the correct position, causing all manner of problems… missed trades, annoying losses – all that other good stuff you like.
So, what pip sizes do you use?
Here’s a quick guide:
- 15 – 30min Timeframe – zone 30 pips
- 1 Hour timeframe – 60 pips
Ready to draw the zones?
Let’s get started…
Here’s the support level I marked earlier on 1 hour timeframe of Eur/Usd.
To draw a support zone across this level, follow these steps: Place the zone on the level, drag the upper edge 15 pips above, then the lower edge 15 pips below.
Here’s how it looks…
Success – we have a support zone!
Our zone covers the signficant lows marked by the level AND includes a few lows not included during line placement, improving the accuracy even further! See how support and resistance zones outperform support and resistance levels now?
Another example…
The image above shows a resisanstance level marked on the 15 min timeframe of Usd/Jpy – I’ll use a lower timerame for this example.
To draw the zone, follow the same steps:
- Place a zone on the resistance level.
- Drag the lower edge 30pips below the level.
- Move the upper edge 30 pips above the level.
Make sense now?
Oh, and for those wondering…
YES – S&R zones can be drawn on the daily timeframe.
But keep in mind: The pips sizes differ because of the volailtily between currencies. The same happens on lower timeframes, but the lower timescale means a smaller difference between currencies, reducing the pip sizes for the zones.
Use the pip sizes below:
- USD – 50 pips above.
Check it out…
The support zone above was drawn on a daily support level, including several nearby lows.
Using Support And Resistance Zones In Your Trading
So, how do you trade support and resistance zones?
The answer… might suprise you.
Here’s why:
Trading support and resistance zones, for the most part, follows the exact same steps used to trade support and resistance level, only with zones instead of lines.
What are these steps, you ask?
Well, they’re simple…
- Draw the S&R zones on the chart.
- Wait for price to enter and form a pattern.
- Enter a trade and place a stop loss.
Easy, right?
But wait, what entry signals should you use?
There are two…
- Pin Bar Candlesticks.
- Engulfing Patterns.
For my money, these are best sigals, for one reason:
Pin bars and engulfing patterns form when the banks start buying or selling. Inside a zone, that suggest the banks want price to reverse. Therefore, the patterns make excellent entry signals before price reverses.
Let’s take a look…
The image above clearly shows the 3 steps – price enters the zone, produces a bullish engulf (our entry signal), before reversing into a bull move.
What about our stop loss?
Always goes underneath, around 2 – 5 pips below.
Price spikes and stops runs can happen with support and resistance zones. Leave a small gap between the zone and stop loss offers protection in case price goes awry. And don’t forget to move the stop as price reverses, too!
Another example…
The resistance zone above on Eur/Usd shows price reversing after a bearish pin bar forms inside the zone.
Like before, it’s the same story…
Price returns to the zone,
A bullish pin bar forms,
Then price reverses.
Our entry signal appears when the pin forms, and our stop goes above the zone – again, leave a small gap to avoid any random price spikes.
Easy, huh?
Summary
So… support and resistance zones — pretty neat, huh?
Hopefully, by now you can see why using zones instead of single support and resistance levels can make your analysis much more practical.
The biggest change is simple:
You’re no longer expecting price to reverse at one exact price.
Instead, you’re identifying an area where price is more likely to react.
This helps solve one of the biggest frustrations with traditional support and resistance — watching price come close to your level, miss it by a few pips, and then reverse without giving you an entry.
By using zones, you give the market the room it naturally needs to move while still maintaining a clearly defined area of interest.
Throughout this lesson, we’ve looked at:
- Why traditional support and resistance levels can be frustrating to trade.
- Why price doesn’t always reverse from one exact price.
- How support and resistance zones provide a broader area for potential reactions.
- Why zones can help reduce the number of trades missed because price fails to touch your exact level.
- How thinking in terms of areas rather than single lines can make your chart analysis more flexible.
But remember, a zone isn’t a guarantee that price will reverse.
It’s simply an area that gives you a better framework for analysing potential reactions.
You still need to wait for your usual entry criteria and manage your risk appropriately.
The goal isn’t to predict exactly where price will turn.
It’s to identify where a reaction is more likely to occur, then use your trading strategy to determine whether there’s a valid opportunity.
So, the next time you identify what looks like a strong support or resistance level, don’t immediately draw a single line and expect price to respect it perfectly.
Instead, ask yourself:
“Could this be better represented as a zone?”
That small change in perspective can make a big difference to how you identify, analyse, and trade support and resistance.
And now that you understand why zones can be useful, let’s move on to the next lesson and look at exactly how to identify and draw them on your charts.