The short answer
Levels are real, but the effect is far too small to trade at retail costs. When we compared real levels (prior day and week highs and lows, round numbers, H4 supply and demand zones, and major levels marked the way traders mark them) with copies shifted to random prices, price reacted at the real ones about as often as at the fakes: 50.2% against 48.9% on 834 touches. Published bank order-book research agrees: the reaction exists, but it is less than one basis point.
What we tested
- Markets
- Seven markets: gold, major FX pairs, and US and German stock indices
- Period
- Year 1 and year 2
- First touch of each level, then whether price reacted (turned away) before breaking through.
- The same measurement on a copy of every level shifted by a random amount, so the result shows the level's own effect.
- Zone trading: rejection at a two-year H4 zone with an M15 close back out, compared with the same rule at fake zones.
Results
| Levels | Real | Shifted copies |
|---|---|---|
| Major levels marked like a trader's (pooled, n 834) | 50.2% | 48.9% |
| Strongest major levels only | 49.6% | 48.0% |
| H4 zones, prior day/week high-low, round numbers | no reliable difference | - |
| Setup | Year 1 | Year 2 |
|---|---|---|
| At real zones | +0.007R (n 463) | -0.003R (n 459) |
| Same rule at fake shifted zones | +0.011R | -0.046R |
| Random side, same moments | -0.042R | -0.080R |
What it means
- Filtering levels by trend (EMA50 on H4 or D1) changed nothing.
- The zone rejection rule was about break-even after costs and beat random sides, but it did just as well at fake zones: the M15 confirmation candle carried the small effect, not the zone.
- A first run made prior-week highs and lows look strong; that turned out to be a look-ahead bug in how weekly bars were labelled, and the effect disappeared once fixed. A level test without fake-level controls finds edges that are not there.
Limits of this test
- One reaction definition per test; we report it as found.
- Levels can still be useful for placing stops and targets; that is a different question (see the take-profit study).
Frequently asked questions
Are support and resistance levels real?
Yes, the mechanism is real: banks' take-profit orders cluster at round numbers and stops just beyond them. But the measured effect is under one basis point and lasts minutes, far smaller than a retail spread, and in our tests real levels reacted about as often as randomly shifted ones.
Do supply and demand zones work?
Rejections at H4 supply and demand zones were roughly break-even after costs in our two-year test, and the same rule did as well at fake zones of the same width.
How every test on these pages works
- Prices: the broker's own bars from an FTMO cTrader account. Fills are simulated minute by minute on one-minute bars; when one minute touches both the stop and the target, the stop is assumed to fill first.
- Costs: the broker's bid/ask spread measured by hour of day, commission per market, and the broker's own overnight swap rates for anything held past the daily rollover.
- Periods: year 1 = 24 Oct 2024 to 23 Oct 2025, year 2 = 24 Oct 2025 to 24 Oct 2026. Daily rules also use Dec 2020 to Oct 2024 ("2021-24"). Rules are written down before testing and are not tuned on the period that judges them.
- Controls: every rule is compared with entries that have no reason behind them (random sides, random days, or the same rule at fake levels), so a result has to beat chance, not just be positive.
- R is the trade's risk (entry to stop). An average of +0.10R means the average trade made a tenth of what it risked; -0.10R means it lost a tenth.
The full results for the rules RezSync Algo trades, by market and risk profile with every trade downloadable, are in the backtest report.
Published research
Related research
Research, not financial advice. These are simulated results on historical prices: they involve no real money, are produced with hindsight of the rules, and past results do not predict future ones. Costs and fills are modelled, and your broker's prices and costs will differ. Trading leveraged products carries a high risk of losing money; test on a demo account first.