Support and Resistance
Trading Price Action with Levels, Breakouts and Stops — Tested on 3,399 Stocks Since 2002
Tired of getting stopped out right before the stock turns your way?
If that sounds familiar, the problem may not be you. It may be the rules.
You drew the line. You bought at support. You put your stop just below it, like every book says. Then price dipped through your stop, took you out, and went on to do exactly what you expected without you. Levels work often enough to keep you using them and fail often enough to leave you puzzled.
Buy at support, sell at resistance, buy the breakout, put your stop just below the line: these rules are in nearly every trading book, course, and video, but almost no one checks what actually happens when price reaches a level. This book does. It measured nearly a million touches of old highs and lows, and several hundred thousand breakouts, on 3,399 American stocks from 2002 to 2026, including more than 1,600 companies that failed or disappeared.
Some of what you've been taught holds up. Support held more often than resistance, 53 times in 100. After a level held, price typically moved about three days' range away. Six breaks in ten were retested within a month. Other rules fall short, and the book shows you exactly where.
If you're new to charts, Part I teaches how traders draw and use support and resistance, step by step, in plain English. If you've traded for years, Parts II and III show how price really behaved at the lines and what to do with it. No hype, no secret system, and no promise of easy money: just a clearer picture of what to expect when price reaches a line, so you can plan your trades with open eyes.
What this book will help you do
- Stop getting shaken out by ordinary noise. A stop just below support was hit about eight times in ten; set stops by how much your stock moves on an ordinary day instead
- Know what to expect after a break. Three breaks in four ran on at least two days' range, and about three in four dipped back to the level within the next month
- Trade a range with realistic targets. In a narrow range, price reached the far side about two times in three; from the bottom of a wide range, it rarely made it to the top
- Size positions so no single loss can do real damage, because how much you risk matters more than any line on a chart
- Skip the levels that don't matter. Double tops, 52-week highs, round numbers, and weekly levels turned price no more often than any nearby price
- See through the reward-to-risk ratio, and what really happened to trades planned at 3 to 1 or 5 to 1
- Use levels for what they do well: deciding before you buy where you'll admit you were wrong
Three parts and 50 charts and diagrams.
Look inside
A few pages from the paperback. Select a page to see it full size.
- The contents
- The opening of Chapter 1
- Figure 8.2: how often first touches held, by kind of level
- Figure 11.1: a breakout and what followed
Who it's for
New traders learning levels from scratch, and experienced traders who have wondered why the conventional wisdom keeps letting them down.
