Candles at resistance closed around 100, wicks reached 100.4–101, and one hit 101.8. Where’s the main line?

Around 100 through the bodies, wicks up to 101 are the zone edge. Closes show where the market agreed on price, so the line goes through bodies. Wicks set the zone edge. The lone spike to 101.8 is an outlier; levels aren’t built on it.

Where does the stop go for a buy at support, if bodies sit at 95 and wicks reach 94.4?

Just below 94.4, beyond the zone edge. Wicks show where price has already been pushed. A stop at 95 gets hit by the first such wick. Beyond the zone edge it only fires if the level really breaks.

Which level is stronger?

A daily one, with three turns and price leaving sharply. A level’s strength grows with the timeframe, the number of touches and the strength of the reaction. One touch on 5 minutes is close to noise.

Levels: from the wick or the body?

Lesson 5 of 23 in the course “Technical Analysis”. Free, with animations and a quiz.

The market’s memory

Support is where falls have stopped more than once: buyers wait there. Resistance is where rises got stuck: sellers wait there. Levels work because people remember prices: whoever missed buying at 96 buys there next time, and whoever bought at 104 and is down is happy to sell at break-even.

The big debate: wick or body

The right answer: a level is a zone, not a thin line. Draw the main line through the bodies, where candles closed most often: the close shows where the market agreed on price. Wicks are the edges of the zone, where price was pushed for a moment. A lone spike sticking out further than the rest isn’t a level, it’s a one-off. The stop goes beyond the zone edge with a small buffer, not right on the line.

Strong and weak levels

Not all levels are equal. A strong one is where price turned several times, that shows on the daily or weekly chart, and that price left sharply on big volume. Round numbers work too: people place orders at 100 and 50,000, not at 99.37.

Drawing it step by step

Zoom out and start on the daily. Find a place where price turned at least twice. Draw a line through the bodies, in TradingView that’s the horizontal line, Alt+H. Then stretch a rectangle out to the wicks: that’s the zone. Now you’ll draw it yourself, and the trainer will tell you if you drew through a spike or cut through candles.

Check yourself

Candles at resistance closed around 100, wicks reached 100.4–101, and one hit 101.8. Where’s the main line?
Correct answer: Around 100 through the bodies, wicks up to 101 are the zone edge. Closes show where the market agreed on price, so the line goes through bodies. Wicks set the zone edge. The lone spike to 101.8 is an outlier; levels aren’t built on it.
Where does the stop go for a buy at support, if bodies sit at 95 and wicks reach 94.4?
Correct answer: Just below 94.4, beyond the zone edge. Wicks show where price has already been pushed. A stop at 95 gets hit by the first such wick. Beyond the zone edge it only fires if the level really breaks.
Which level is stronger?
Correct answer: A daily one, with three turns and price leaving sharply. A level’s strength grows with the timeframe, the number of touches and the strength of the reaction. One touch on 5 minutes is close to noise.

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