Levels & geometryTirone Levels
John Tirone's horizontal support and resistance lines, drawn by dividing a period's high-low range.
Works best in ranging marketsEngine-computed on a fixed sample series
What it is
Tirone Levels are a set of horizontal support and resistance lines developed by John Tirone, drawn by dividing a chosen period's high-to-low range into fixed proportions. They behave like static pivot levels: price tends to pause, reverse, or accelerate as it reaches each line. To a beginner they answer a practical question — within the recent range, where is price relatively high, relatively low, and at equilibrium? Rather than reacting to every wiggle, they give you a small map of meaningful levels derived purely from the range. They come in two flavours, the simpler midpoint method with three lines and the fuller mean method with five. Traders use them to frame ranges, set targets, and place stops around the recent high and low.
How they're calculated
Both methods start from two numbers: the highest high and the lowest low over a lookback period, and the range between them. In the midpoint method, three lines are drawn — a top line one-third of the way down from the high, computed as the high minus one-third of the range; a centre line at the exact midpoint of the range, the average of the high and low; and a bottom line one-third of the way up from the low, the low plus one-third of the range. The top and bottom therefore sit symmetrically inside the range, carving it into thirds around the centre. The mean method keeps a central adjusted-mean line and adds two extreme lines above and below, built from the range and its average, so it brackets price with an outer band as well as inner reference lines. Whichever method you use, the levels are recomputed as the lookback window rolls forward and the high or low changes. The arithmetic is deliberately simple — these are geometric divisions of a range, not smoothed averages.
Reading them step by step
Think of the centre line as the equilibrium of the range: price above it is in the upper half and biased strong, price below it is in the lower half and biased weak. The top line marks where price is relatively high within the range and often meets resistance, while the bottom line marks relatively low and often finds support. As price approaches any line, watch for one of two reactions — a pause and reversal, which confirms the line as active support or resistance, or an acceleration through it, which signals the range is expanding. A decisive break of an outer line, especially in the mean method, suggests price is escaping the recent range rather than respecting it. Because the lines are static until the window updates, they give you fixed reference points to plan around rather than a moving signal. Reading them is about location — knowing where price sits relative to its own recent range.
Best timeframes and settings
Tirone Levels adapt to any timeframe because the only setting is the lookback period used to find the high and low. A common choice is around 20 bars, echoing a month of daily data, which suits swing traders framing the recent range. Shortening the lookback makes the levels hug recent price and update more often, better for intraday work but more prone to shifting; lengthening it produces broader, steadier levels suited to position trading. On a daily chart a 20-day range captures the recent swing structure well, while a weekly chart with a longer lookback maps the larger picture. The responsiveness trade-off is the familiar one: a shorter window reacts quickly but jumps around, a longer window is stable but slow to reflect a new range. Because they are derived from raw highs and lows, they pair well with whatever lookback you already use for other range tools.
When and where to use them
These levels suit rangebound markets best, where price oscillates between the high and low and repeatedly respects the interior lines. In such conditions the centre line and the thirds act as natural fade points. In a strong trend, by contrast, price slices straight through the levels, so they are far less useful and can lull you into fading a move that keeps going. They apply to any liquid asset — stocks, futures, forex, crypto — since they need only a high and a low. Avoid relying on them as breakout signals in fast-trending conditions, and instead use them to define the range you expect price to stay within. When a market has clearly gone directional, retire the levels until it settles back into a range. Their equilibrium-and-thirds framing is a range trader's tool by design.
Strategies that use them
A range-fade strategy buys near the bottom line with a stop below the recent low and sells near the top line with a stop above the recent high, taking the centre line as the first target and the opposite extreme as the second. A mean-reversion variant treats the centre line as fair value: fade moves that stretch to the outer lines, expecting a pull back toward the centre, and cut the trade if price accelerates through the extreme instead. A breakout strategy flips the logic — a decisive close beyond an outer or extreme line is treated as a range expansion, and you trade in the breakout's direction with a stop back inside the range. In all three, the recent high and low give you clean, objective stop placement. The centre line doubles as a trailing reference to lock in gains as price traverses the range.
Combining them with other indicators
Because Tirone Levels only tell you where price is within a range, they benefit from a tool that tells you whether a range even exists. ADX is ideal: a low ADX confirms the rangebound condition in which the levels work, while a rising ADX warns that price is trending and likely to blow through them. Oscillators such as RSI or the stochastic pair beautifully with a range-fade, flagging overbought as price hits the top line and oversold as it hits the bottom. Volume helps validate breaks of the outer lines — a break on heavy volume is more likely to hold. They also sit comfortably alongside Bollinger Bands and Murrey Math lines, other range-partitioning frameworks, though stacking too many overlapping levels clutters the chart. Candlestick reversal patterns at a Tirone line add confirmation to a fade.
Where they fail
The central weakness is lag: the levels are built from a past range and must be recomputed as that range evolves, so a sudden expansion leaves the old lines stale. In a strong trend price cuts through every line, and traders who mechanically fade the top or bottom get run over by the ongoing move. The lines carry no directional information of their own — they only say high, low, or middle within a window, so using them without a regime read is a mistake. Choosing too short a lookback makes the levels whip around and lose meaning; too long a lookback makes them ignore the current swing. Avoid the traps by confirming a ranging regime before fading, treating outer-line breaks as potential trend starts rather than automatic reversals, and refreshing your read as the window rolls. They are a map of the range, not a forecast.
A worked example
Suppose over the last 20 days a stock's highest high is 120 and its lowest low is 100, a range of 20. Using the midpoint method, the top line is 120 minus one-third of 20, or 113.33; the centre line is the midpoint at 110; and the bottom line is 100 plus one-third of 20, or 106.67. Price is currently drifting at 107, just above the bottom line, and RSI reads 32, near oversold. You buy at 107 with a stop at 99.50 below the recent low, risking 7.50, and set your first target at the centre line, 110, and a second target at the top line, 113.33. Price bounces off 106.67, tags 110 where you take partial profit, and stalls at 113.33 where RSI turns overbought — you exit the remainder. Had price instead sliced straight through 113.33 on heavy volume, you would have read it as a range breakout and stepped aside rather than fading it.