Technical Glossary / Support, Resistance & Price Levels
Support Zone
A band of prices, not a single tick, where demand has appeared.
Teaching sketch. It shows the shape, not a live quote and not a trade signal.
Definition
A support zone is the thickness of support. Lows do not match to the tick. Wicks, closes, and several tests form a band. The zone is where you expect a reaction, and the far side of the zone is where the idea is wrong.
How to identify it
Shade the cluster of lows rather than picking the extreme tick. Include the bodies if closes were the real holds, or the wicks if the rejections were the story. Be consistent.
Bullish reading
A test that closes back out of the zone is a hold. Entering at the top of the zone gives a worse price and a tighter stop. Entering at the bottom gives a better price and more chance of being run through. Choose before the test.
Bearish reading
A close through the entire zone, not just into it, is the break. Stops that sit in the middle of a zone get hit by ordinary noise.
Common mistakes
Drawing the zone so wide that any trade inside it can be called a hold. A zone that contains half the chart is not a level.
Limitations
Zones are still subjective. Two traders will shade different boxes. The discipline is to shade it before the test and not widen it afterward.
This note explains the term. A sketch shows the shape of the idea. Neither is a recommendation, a signal, or a comment on any security. Indicator settings and exchange conventions differ. Check the live chart and the contract specification before you use a number.