Lesson 2
Mark useful levels and leave room around them
Build a small, readable map of prior extremes and areas of repeated reaction.
Study time: about 8m
Lesson
Prior session highs and lows, clear swing extremes and repeated reaction areas can help organize a chart. They are reference prices, not barriers. Draw only levels you can explain using evidence already visible.
Use a narrow zone when different bars reacted at nearby prices. Record its boundaries and why you chose them. “Supply” and “demand” are common labels for areas preceding an impulse, but a historical candle cannot establish that resting orders remain there or identify who holds them.
Keep the map sparse. A level every few ticks makes almost any move look significant. Start with the current session boundaries and the nearest relevant higher-timeframe areas. When price reaches a zone, observe whether it rejects, holds beyond it, or repeatedly crosses it. Those are different behaviours that call for different interpretations.
Worked example
Several completed reactions occur between 100 and 101. Mark that area as a support reference. A wick to 100.50 with a close at 102 differs from sustained closes below 100. Neither guarantees what comes next, but the second no longer matches a simple “support held” thesis.
Try it in replay
Mark a maximum of three areas on a replay chart. For each, write the source, boundaries and the behaviour that would make it less relevant.
Check your reasoning
Each area should have an observable reason and an invalidation or review condition. If you cannot choose among fifteen lines, remove the least relevant ones before making a decision.