No-trade zone
A no-trade zone is a band of stacked support or resistance where you take no position. Inside it, your entry and your stop sit too close to pay.
In depth
Levels cluster. When two or three sit within a short distance, you cannot trade them separately. Merge them into one band and delete the lines inside. On a large, high-priced stock that distance is around a dollar, and it is tighter on cheaper names.
Inside the band there are no odds worth taking. Buy at 100.30 with a stop at 99.90 and a target at 100.60. You risk 40 cents to make 30. The tradeable states are above the band and holding, or below it and holding. The edge of the band is the event, not the middle.
Why it matters
Zones usually get taught as places to enter, so this reverses a habit. If your losses come in choppy bursts, check whether those entries sit inside a band you drew. Naming it a no-trade area also stops you widening the stop until the numbers look acceptable.
Trade replay marks your fills on a TradingView chart. You can see which entries sat inside a band. Tag those trades, and the By tag table shows what staying out would have saved you.
Frequently asked questions
Around a dollar on a large, high-priced stock and tighter on cheaper ones. If the leftover move is tiny, the band grew too wide.
Yes. Wait for a candle to close beyond the edge. Then trade the retest, with your stop just inside the band.
Keep your No-trade zone trades on the record in TraderLog
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Every trading morning at 8:40 ET our model draws the SPY, QQQ and IWM zones it expects to matter, on a TradingView chart, before the open. Where price reaches one, it has turned 74 percent of the time. Free, no account. See today's map