Short answer: buying support did nothing measurable. Selling resistance lost reliably, 8 versions cleared our statistical bar and all 8 were losses. And when we compared support and resistance entries against random entries using the same stop and the same target, on the same days, the random entries did better on every chart tested.
Read this first: what this test can and cannot tell you
- Gold only (XAUUSD), Deriv's feed, candles on the UTC clock, January 2017 to September 2026 (9 years 8 months). Gold roughly tripled over this period, which matters for anything that sells, and is handled explicitly below.
- One precise, written definition of a level, the previous day's or previous week's high and low. Not hand-drawn lines, not trendlines, not round numbers. Those are different concepts and need their own tests.
- Every trade pays the spread, at least 15 points from the broker's own record, once per round trip.
- Entries are market orders at the next candle's open. A resting limit at the level would flatter the result for mechanical reasons unrelated to levels (measured and on record). The level decides when.
How to read the numbers (skip if you already know)
| Term | What it means here |
|---|---|
| bp (basis point) | 0.01% of price. At $4,300 gold, 1 bp ≈ $0.43 per ounce. |
| The spread you pay | Once per round trip, at least 15 points. Across this sample it averages 0.89 bp per trade, falling from 1.19 bp in 2017 to 0.37 so far in 2026 as gold's price rose. |
| t | Distance from zero in units of the result's own noise. Under 2 is ordinary randomness. A large negative t is a reliable loss. |
| The bar (3.41) | 78 versions were tried, so the threshold rises to match (Bonferroni, two-sided 5%). |
| Alpha | What is left after subtracting gold's own move over the same holding time in the same year, the fair way to judge a short in a rising market. |
| "Passed" | Cleared the bar and held its sign across years and halves. It does not mean profitable: a reliable loss passes too, and 8 did. |
What we tested
The idea, in plain words. Price is supposed to stall and turn at levels where it stalled and turned before. The cleanest, least arguable version of a level is the previous session's extreme, because everyone can see it and nobody has to draw it.
The rules, exactly.
- Resistance = the previous UTC day's high (or the previous Sunday-week's high). Support = the corresponding low.
- The trigger: the first candle of the day (or week) whose high reaches resistance → SELL at the next open; whose low reaches support → BUY. First touch only, so one trade per level per period.
- Exits: at the close 4, 12 or 24 candles later.
- Charts: day levels on M1, H4; week levels on M1, D1. W1 excluded (one candle a week).
- Grid: 6 charts × 2 sides × 3 holds + 7 charts × 2 sides × 3 holds = 78 versions.
Results: previous day's levels, exit after 12 candles
| Chart | Trade | Trades | Win rate | Net per trade (bp) | t | Passed? |
|---|---|---|---|---|---|---|
| M1 | buy support | 1,340 | 50.0% | −0.02 | −0.04 | no |
| M1 | sell resistance | 1,523 | 44.3% | −2.79 | −7.18 | yes, a reliable loss |
| M5 | buy support | 1,335 | 51.2% | +1.03 | +1.28 | no |
| M5 | sell resistance | 1,513 | 46.0% | −2.31 | −3.11 | no |
| M15 | buy support | 1,315 | 51.3% | +1.18 | +1.06 | no |
| M15 | sell resistance | 1,485 | 44.9% | −2.23 | −2.24 | no |
| M30 | buy support | 1,301 | 50.7% | +0.15 | +0.10 | no |
| M30 | sell resistance | 1,452 | 46.8% | −2.72 | −1.97 | no |
| H1 | buy support | 1,182 | 53.0% | −1.02 | −0.46 | no |
| H1 | sell resistance | 1,333 | 47.9% | −5.45 | −2.97 | no |
| H4 | buy support | 751 | 52.2% | +4.57 | +0.92 | no |
| H4 | sell resistance | 806 | 48.4% | −6.65 | −1.39 | no |
Results: previous week's levels, exit after 12 candles
| Chart | Trade | Trades | Win rate | Net per trade (bp) | t | Passed? |
|---|---|---|---|---|---|---|
| M1 | buy support | 208 | 46.6% | +1.25 | +0.58 | no |
| M1 | sell resistance | 278 | 41.7% | −5.05 | −3.67 | yes, a reliable loss |
| M15 | buy support | 208 | 49.0% | −4.13 | −1.07 | no |
| M15 | sell resistance | 278 | 47.1% | −1.66 | −0.77 | no |
| H1 | buy support | 204 | 51.5% | −5.73 | −0.87 | no |
| H1 | sell resistance | 273 | 43.2% | −9.51 | −2.12 | no |
| D1 | buy support | 124 | 55.6% | +62.57 | +2.49 | no (small sample) |
| D1 | sell resistance | 149 | 50.3% | −15.85 | −0.55 | no |
8 of 78 versions passed the bar. Every one was "sell resistance", and every one was a loss, the 1-minute and 5-minute charts on day levels, the 1-minute on week levels. On the random control series: 0 of 78, maximum |t| 2.38.
It is not only gold's rise. The 1-minute day-level short keeps a negative alpha of −1.85 bp with t −4.77 after gold's drift is removed. Selling the first touch of yesterday's high did worse than simply being short gold over the same twelve candles.
The control that matters: random entries, same stop, same target
For every support and resistance entry we also took one random entry per trading day, and gave both the identical plan, a stop 1 ATR away and a target 2× the risk. If levels are special, entries at levels should beat entries at nothing.
| Chart | At a level | Win rate | Random entry, same plan | Win rate |
|---|---|---|---|---|
| M15 | buy support (1,335) | 30.6% | random long (2,878) | 31.1% |
| M15 | sell resistance (1,510) | 28.7% | random short (2,862) | 30.4% |
| H1 | buy support (1,298) | 30.7% | random long (2,575) | 32.7% |
| H1 | sell resistance (1,473) | 29.8% | random short (2,610) | 30.9% |
| H4 | buy support (1,097) | 32.3% | random long (1,733) | 33.8% |
| H4 | sell resistance (1,218) | 30.6% | random short (1,771) | 32.2% |
Six comparisons, and the random entry wins all six. The differences are small, one to two points, and we are not claiming random entries are better in any strong sense. The claim is the one the table supports: entering at the previous session's extreme did not beat entering at an arbitrary time on the same day.
Year by year
Selling the first touch of yesterday's high, 1-minute chart, exit after 12 candles, the version that passed:
| Year | Trades | Win rate | Net per trade (bp) |
|---|---|---|---|
| 2017 | 137 | 39.4% | −2.17 |
| 2018 | 143 | 43.4% | −1.53 |
| 2019 | 155 | 41.3% | −2.34 |
| 2020 | 164 | 42.7% | −4.48 |
| 2021 | 163 | 47.9% | −1.94 |
| 2022 | 150 | 45.3% | −1.88 |
| 2023 | 158 | 55.1% | −2.77 |
| 2024 | 174 | 40.8% | −3.36 |
| 2025 | 172 | 37.2% | −3.81 |
| 2026 | 107 | 52.3% | −3.32 |
Ten years, ten losses. Note 2023 and 2026, where more than half the trades finished green and the average was still negative, the losers were bigger than the winners. That is the shape of most "high win rate" selling into strength.
Buying the first touch of yesterday's low, 15-minute chart, the best-looking version on the page, and still not a result:
| Year | Trades | Win rate | Net per trade (bp) |
|---|---|---|---|
| 2017 | 123 | 56.1% | +2.09 |
| 2018 | 152 | 46.7% | −0.04 |
| 2019 | 128 | 48.4% | −1.45 |
| 2020 | 122 | 53.3% | +0.12 |
| 2021 | 144 | 55.6% | +5.05 |
| 2022 | 150 | 50.0% | +0.85 |
| 2023 | 146 | 43.8% | −1.73 |
| 2024 | 134 | 57.5% | +2.96 |
| 2025 | 116 | 56.9% | +2.42 |
| 2026 | 100 | 46.0% | +1.97 |
+1.18 bp per trade, positive in seven years of ten, t +1.06, comfortably inside the range that 78 coin flips produce. It is the kind of table people build strategies on, and it is exactly why the bar is set where it is.
The asymmetry, said plainly
Every concept we have tested on gold shows the same shape: the buy side ranges from neutral to mildly positive, the sell side loses, and the sell side loses more in the years gold rose fastest. Part of that is simply the market. But here, and in the liquidity-sweep test, the sell side keeps losing after gold's own rise is subtracted.
The honest summary is not "support and resistance works for buying". It is: over these nine years, mechanically selling gold into a prior high was a reliable way to lose money, at levels and not at levels alike, and buying prior lows was indistinguishable from doing nothing in particular.
What this page does not say
- It does not test levels you draw yourself, multi-touch levels, round numbers, trendlines, or levels confirmed by a candlestick pattern. Each is a separate concept.
- It does not test waiting for a rejection candle before entering, the trigger here is the touch itself.
- It does not test other markets.
How we tested
- The rules were written and dated before the scanner existed. Nothing was tuned afterwards.
- Closed candles only; market entry at the next open; first touch per period only; one position at a time.
- 78 versions, so the bar rises to match (Bonferroni). A version must also hold its sign in ≥70% of years, in both halves, and survive removal of gold's drift.
- The identical grid on a random price series: clean, 0 survivors, maximum |t| 2.38.
Reproduce it: every rule is written out in full above, so anyone with gold price data can rebuild this test and check our numbers. The candles are the broker's and are not ours to redistribute.