Courses / Trading Fundamentals
Support & Resistance
The foundation of all technical analysis
Support and resistance are the most fundamental concepts in technical analysis. Every trading strategy involves them in some form.
Support is a price level where buying pressure is strong enough to prevent further decline. Think of it as a floor — price bounces up from it. Resistance is a price level where selling pressure prevents further advance. Think of it as a ceiling.
These levels form because of market memory. Traders remember where price reversed before and place orders at those levels again. The more times a level is tested, the stronger it becomes — but each test also weakens it slightly.
The most powerful concept: when support is broken, it becomes resistance. When resistance is broken, it becomes support. This "role reversal" is one of the most reliable phenomena in trading.
Draw support and resistance as zones (areas), not exact lines. Price rarely stops at an exact number.
Pro tip: Round numbers (1.1000, 50000) often act as psychological support/resistance.
Pro tip: The strongest levels are ones visible on multiple timeframes.
Pro tip: Fresh (untested) levels are stronger than levels tested many times.
Common mistake: Drawing support/resistance as exact price lines. Better: Use zones — price rarely reverses at an exact number.
Common mistake: Drawing too many levels on the chart. Better: Focus on 2-3 key levels that are clearly visible.
Key takeaways
- Support = buying zone (floor), Resistance = selling zone (ceiling)
- More tests = stronger level
- Broken support becomes resistance and vice versa
- Draw zones, not exact lines
Quiz
- When support is broken, it typically becomes: Answer: Resistance. This "role reversal" is one of the most reliable concepts — broken support becomes resistance.
- Support and resistance should be drawn as: Answer: Zones/areas. Price rarely reverses at exact numbers. Zones better represent where buying/selling pressure exists.
- What makes a support level stronger? Answer: Multiple bounces from it. The more times price bounces from a level, the more traders notice and place orders there.
Educational content, not financial advice.