Support & Resistance aren't LINES they're ZONES
One of the most persistent mistakes retail traders make is treating support and resistance (S/R) as precise, surgical price levels. They draw a single horizontal line at a prior high or low, expecting the market to respect it to the exact tick.
But real markets don’t behave that way. Professionals understand something crucial:
👉 Support and resistance are zones — dynamic, flexible, and influenced by volatility.
This “breathing” behavior of S/R is not subjective. It’s observable in both market microstructure research and decades of trader experience.
Why S/R Behaves Like a Zone — Not a Line
- Order Flow Is Not Concentrated at a Single Price
Institutional orders rest across ranges, not exact levels. Market microstructure studies show that liquidity providers layer orders across multiple price increments, creating clusters of buying or selling interest rather than pinpoint boundaries.
- Volatility Physically Stretches and Compresses Levels
When volatility rises, support/resistance widens. When volatility contracts, these zones tighten. This is consistent with research showing volatility governs how far price overshoots or undershoots expected pivot areas.
- Professional Traders Use ATR-Based Levels
Institutional traders use volatility-adjusted levels. S/R should be defined as “areas of confluence,” not hard lines.
How You Can Adapt Like a Professional
✓ Use Zones, Not Lines
Define support/resistance as rectangles, not lines. For example:
S/R zone = prior pivot high ± 0.5 to 1.0 ATR
✓ Expect Overshoots
Price will often push through zones before reversing — this is liquidity hunting, not invalidation.
✓ Update Zones Dynamically
When volatility changes, your zones should widen or narrow accordingly.
How to Adjust your Charts… Instantly in real time!
Preparation is mandatory for trading success. But to manually mark up your charts and adjust them for volatility is time consuming. And if you trade multiple assets (futures contracts, stocks, ETFs, etc.) you’ll quickly find it’s humanly impossible.
Learn how to get this done automatically and in real time. Watch this free video training. Click here.
To your trading success,
Mike Siewruk
PS: Was this advice helpful? Feel free to pass this link for a FREE membership to Trade Aptitude along to your trading buddies: thedailymarketforecast.com/signup