Support and resistance

Support and resistance tell you where the market has changed its mind before, and where it may do so again.

Floors and ceilings

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Step through how a level is found and used.

Support is a price area where falling prices have stopped and turned up before. Resistance is where rising prices have stalled and turned down. They work partly because so many traders watch them: orders cluster around obvious levels, so price reacts there.

Zones, not lines

Price rarely turns at exactly the same number twice. Draw levels as zones a few pips wide, through the cluster of turning points rather than through one exact wick. On H1 a zone of 5–10 pips is typical; on D1, 20–40.

Levels flip

When support breaks, it often becomes resistance: traders who bought there are now losing and sell on any rally back to their entry. The same happens in reverse when resistance breaks. A broken level is still a level; it has just changed sides.

Try it

Price has turned up from the same area three times. Where is support?

Tap on the chart where you would draw the level.

You do not need the exact pip. Within the zone is correct.

Notice how the level came from where price actually turned, not from a round number or a guess.

Quick check

1. Question 1 of 3

   What makes a price area support?

   AIt is a round numberBFalling prices have stopped and turned up there beforeCA moving average passes through it

Go deeper: Support and resistance, without the jargon · Stop losses: where to place them · Breakout Trading in Forex: How to Avoid Fakeouts · Fibonacci Retracement in Forex: How to Use It Well