Trading forex involves substantial risk of loss and is not suitable for all investors. This site is for educational purposes only.  Full Disclaimer →
Home / Definition / Levels Have No Inherent Properties
Definition

Levels Have No Inherent Properties

A price level is just a number. Whatever significance it has comes entirely from the orders currently sitting at it.

Full Explanation
A level does not have memory, strength, weakness, or obligation. The same level that absorbed perfectly on Monday may give way instantly on Thursday — not because the level changed, but because the orders at it are completely different. Calling a level strong support implies it carries a property forward through time. It does not. What gives any level significance at any moment is the current collection of limit orders sitting there. When those orders are consumed, withdrawn, or overwhelmed by larger aggression, the level breaks — regardless of how many times it held before or how significant it looks on the chart.
6
Chapter 6 · What The Chart Is
Levels Have No Power
Support and resistance might be the single most universal concept in all of retail trading. You’d be hard-pressed to find a trader, on any platform, following any methodology, who hasn’t drawn a horizontal line on a chart and said “this is support” or “this is resistance.”
From the Blog 1 post
"Support and Resistance" — What You're Actually Saying
When you draw a line on a chart and call it support, you're making a specific mechanical claim. Most traders never examine what that claim actually says — or how much uncertainty it hides.