After completing this section, you will understand what we do and the philosophy behind the zones.  We'll also tell you what to expect from the rest of the classrooms in Zone University.

The Concept Behind Our Zones

If you have traded for any length of time, you most certainly have seen on your charts, and  heard CNBC, newsletters, and other traders talk about support and resistance when trading.  50/100/200 day moving averages, double top/bottom, fibonacci retracements, floor trader pivots, Elliott Waves - you name it, they exist.  And they are all valid to a certain extent - price "usually" reacts to these areas, sometimes to the extent that they are profitably tradable.

As you may know, you will find that professional traders use a variety of indicators as well as historical price movement, a combination of which makes up the "system" that they trade.  If it is a decent system that is executed upon with discipline and good to great money management techniques, then the trader will be profitable.  To determine intraday targets for markets such as the S&P eminis, Forex, TF, YM, etc, traders look for, and compute prior to the market opening, various price points such as:

• Prior day/week/month highs and lows
• Fibonacci retracement/extension levels
• Elliott Waves
• Floor Trader Pivots
• Double tops/double bottoms, both intraday and over multiple time periods.

It's All About Confluence

My question for you is this: would you assume that the odds that price will stop and reverse at a certain price increase as more of the above occur at the same price?  The answer is, of course, yes!  If there is a prior day/week month level at 1040, and a FT pivot at the same price, and an Elliott Wave ending at 1040.50, the fact that you have groups of traders that individually follow these 3 methodologies all looking to enter at the same price increases greatly the odds that price will reverse there, at least enough for you to make your profit.

Now, what if you took all of the above methodologies and more, plot what each group sees as key levels, and, when you see confluence(multiple methodologies all arriving at the same price), plot that price for the day as a high probability area for a reversal.

THAT, my friend, is what the ToTheTick zones are all about, and what you get when you sign up with us!  It's like having experts in Fibonacci, Elliott Wave, FT pivots, and other forms of support resistance working for you each day, so that when the market opens, you know exactly where the most likely turning points are for the day.

Now that you have a basic understanding of how the zones are constructed, let's talk about how to decipher what to look for as price moves into/close to a zone.

So you should know by now the zone below price action is called support.  Likewise, the zone above price action is called resistance.  We generally look for role reversal to occur if price moves 2-3 points beyond a zone.  So, in the screenshot below, the zone is from 1038.25 - 1039.75.  We considered this area support, and it did provide two solid tradeable bounces.  Whenever price approaches a zone for the third time, one must be cautious.  Sure enough, price falls though, and it falls through solidly, at least 2 or 3 points below.  Now, that zone that previously was resistance should now be considered support.  This is called role reversal.  So if price retraces back into that level, one should be looking to enter short either in the zone or after a reversal occurs.  In this case, look at the how price dropped when it touched the edge of the zone.  The Cross And Touch trade setup would have gotten you short on first pullback after the zone provided resistance.  So take a look at the picture below:

Let's take a break.  We have a quick challenge for you.  Do you see the ABC Patterns in the screenshot above?There were at least three on this day.  One got you long 4 ticks from the low of the day.  Yes, there wasn't a zone there.  Sorry! The other two gave you a specific entry within our zones, one long and one short, both are orange circled entries.  Confused?  Don’t worry, there’s a whole classroom that covers the ABC Pattern.  The point is, you don't have to guess where to enter when price is in the zone.  You can look for confirming trade setups to take a countertrend trade within the zone.  Or, you can wait for the reaction to occur first, and then take advantage of it.  Our trade setups address both of these methods.

So What?  How Do I Trade The Zones?

Well, that is a great question, and we have an answer!  There are multiple ways to trade the ToTheTick support and resistance zones.  Which setup or combination of setups you decide on depends on you and what type of trader personality you have.  We will give you multiple ideas, but then you can decide which is best suited for you.  Soon, you will begin studying the following trade setup classrooms: Cross and Touch, Volume Reversal, and MACD Divergence.  Master one at a time and trade it!  The later classrooms include of favorite structure techniques;
but they are much more advanced and might require further study outside of ToTheTick.

If you like a particular setup and have specific questions about it, feel free to contact us.  One of of us will respond based on whoever has the most experience trading that particular set up.  That being said, please remember, we are not an educational service!  We are traders, and it is not possible to support each and every basic question about trading.  If you intend to use the zones with our trade setups, you must study diligently and spend lots of time looking at historical price action.  Being a profitable trader requires lots of work.  On the other hand, you are using our zones as a confirming factor alongside of your own trading methods, well, in that case we believe that the value of our service is fairly obvious.