Using a Stop Entry to Filter Breakouts at Support and Resistance

Summary

The script describes a conditional entry around a support or resistance level. When price reaches a specified limit level, it places a stop order at a separate trigger price; for a buy, the trigger is set several pips above the level. The intended effect is to enter only if price subsequently moves through the level, filtering out some signals that touch the level but fail to break out.

This is an order-entry concept rather than a complete trading system. The short description provides no test results, market or timeframe specification, position sizing, exit rules, or treatment of slippage and gaps. Its example refers to support even though a buy stop above a level is commonly associated with a resistance breakout, so the precise level interpretation should be checked before use. The document does not establish whether the filter improves results.

Key ideas

• A stop entry can require price to move beyond a level after first reaching a specified limit price.
• The example places a buy stop several pips above the level to seek confirmation of an upward break.
• The method aims to reject touches that do not develop into a breakout.
• The description omits testing, risk controls, exit rules, and execution details.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.