Profits from identifying and trading price reactions at key levels
| Strategy Type | Key Level Identification / Zone Trading |
| Market Outlook | Profits from identifying and trading price reactions at key levels |
| Risk Profile | Low to Moderate - levels provide clear entry and stop points |
| Reward Profile | Consistent returns from level-based trading (15-35%+) |
| Time Horizon | Short to medium-term (hours to weeks) |
| Iv Environment | N/A - pure price-based strategy |
| Breakeven | Depends on level accuracy and trade management |
| Primary Instruments | US stocks via CFDs, S&P 500 E-mini, NASDAQ 100 E-mini, Forex, Commodities |
| Mas Compliance | MAS regulated brokers required for CFD/futures trading |
| Trading Hours | Multiple sessions - US 9:30 PM - 4 AM SGT, Asia 8 AM - 4 PM SGT, Europe 3 PM - 11 PM SGT |
| Contract Size | E-mini S&P: USD50 per point; Forex: varies by pair |
| Settlement | Cash settled for CFDs and futures |
| Tax Treatment | No capital gains tax for individuals in Singapore |
| Margin Requirements | Standard CFD/futures margin |
| Cdp Account | Not required for CFD/futures |
| Singapore Relevance | Support and resistance concepts apply universally across all markets and sessions - fundamental skill for all trading |
Support is a price level where buying overcomes selling, causing price to bounce. Resistance is where selling overcomes buying, causing price to reverse. They represent supply and demand zones.
Price rarely reverses at exact prices. Zones account for wicks, noise, and the approximate nature of supply/demand. A zone typically spans 0.5-1% around the core level.
When broken support becomes resistance, or broken resistance becomes support. Trapped traders create opposite pressure when price returns to the broken level.
Minimum 2 touches to confirm a level. 3-4 touches is good, 5+ is very strong. Each touch where price reacts confirms the level's significance.
Higher timeframe levels are stronger. More touches increase strength. Recent levels are more relevant. Confluence with other factors (round numbers, Fib) adds strength.
Draw Fib from swing low to high in uptrend. 38.2%, 50%, 61.8% mark potential support for pullbacks. When Fib aligns with swing level, it creates strong confluence.
Point of Control is the price with highest traded volume. It acts as strong S/R. Price gravitates toward POC. Value Area High/Low also create levels.
Score based on: touch count (1 pt per touch, max 5), timeframe (weekly=5 to 1H=2), recency (recent=3 to old=1), reaction strength, and confluence. Score 8+ is strong level.
True break: strong candle close beyond level, higher volume, continued movement. Fakeout: quick return to range. Wait for confirmation before trading breaks.
Start with weekly/daily for major levels. Add 4H for more detail. Use 1H for entries. Higher TF levels override lower TF. Trade when levels align across timeframes.
The last candle opposite to a major move. Bullish OB is last bearish candle before rally. Marks institutional positioning. Trade retest of order block zone.
Clusters of stop losses at obvious levels (above swing highs, below swing lows). Institutions target these for liquidity. Often see stop hunts before reversals.
Use swing detection with lookback confirmation. Cluster nearby swings into zones based on price proximity threshold. Score levels on multiple factors. Rank and filter.
Optimize on training period (2 years), test on subsequent out-of-sample (6 months), roll forward. Validates that optimized parameters work on unseen data.
Document all failures. Analyze patterns - context wrong, level weak, trend against. Use strict stops. Failed levels can become opposite trade setups.
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