Price hits a level that's held before and holds again. The oldest setup in trading, still working.
“The fourth or fifth touch of a level is statistically weaker than the first, so count your touches before you take the trade.”Jason Parker · Founder
A level has held twice before, maybe three times. Price comes back a fourth time, and you're betting it holds again rather than betting on a new idea entirely. The edge isn't the bounce itself. It's picking a level that actually matters instead of a random round number that doesn't matter to anyone else.
| Entry | Rejection candle at the level, not a blind limit order sitting there hoping |
| Exit | Prior swing high or low, or the opposite side of the range if one exists |
| Stop | A small distance past the level, since a genuine hold shouldn't need much room |
An illustrative example built to show the setup’s shape. Not historical price data, and not tied to any specific ticker.
Every level breaks eventually, and the fourth or fifth touch is statistically weaker than the first. Traders who keep buying the same support after it's already been tested four times in one session are the ones funding this setup for everyone else. Count your touches.
None of this works without the framework underneath it. Read risk management next, or run your own numbers in the position-size calculator.
Common questions about trading this setup, answered straight.
A rejection candle at the level, not a blind limit order sitting there hoping it holds. The stop sits a small distance past the level, since a genuine hold shouldn't need much room, and the exit is the prior swing high or low, or the opposite side of the range if one exists.
The edge isn't the bounce itself. It's picking a level that actually matters instead of a random round number that doesn't matter to anyone else, and a level that's already held twice or three times is a stronger bet than one being tested for the first time.
Every level breaks eventually, and the fourth or fifth touch is statistically weaker than the first. Traders who keep buying the same support after it's already been tested four times in one session are the ones funding this setup for everyone else. Count your touches before taking the trade.
Trade