Beginner · Lesson 4 of 11 · 5 min video · 7 min read
Support and resistance
Support and resistance are the prices where the market has turned before. Learning to draw them well, as zones rather than thin lines, is one of the most useful chart skills there is.
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What they are
Support is a floor: a price where buyers stepped in before and pushed price back up. Resistance is a ceiling: a price where sellers stepped in and pushed it back down. Because so many traders remember these prices and leave orders there, price often reacts at them again.
Draw zones, not lines. Price rarely turns at exactly the same price twice, so cover the area from the candle bodies to the tips of the wicks.
How to draw a level
- Start big. Use the 4-hour or daily chart first, where the important levels are.
- Find clear turns. Look for places where price reversed sharply, not small wiggles.
- Draw the zone from the bodies to the wick tips around those turns.
- Keep only the best: zones with two or more touches, or one very strong reaction.
- Drop down to your trading timeframe and keep those zones in view.
What makes a level strong
| Sign | Why it matters |
|---|---|
| Several clean touches | More traders have noticed it |
| A sharp move away | Strong buying or selling happened there |
| Found on a bigger timeframe | More traders are watching it |
| A round number (1.1000, or 4,000 on gold) | Orders tend to gather there |
| Recent | Still fresh in traders’ minds |
Each touch also uses up some of the orders waiting there, so a level hit again and again in a short time can eventually give way.
When a level breaks
A broken level often swaps roles: old resistance becomes new support, and old support becomes new resistance. Many traders wait for price to break a level, then come back to test it from the other side (a “break and retest”) before trading. Always wait for a candle to close beyond a level: wicks poke through all the time.
On the daily chart, EURUSD turns down twice from the 1.1000 to 1.1020 zone. Later a strong candle closes at 1.1080, well above it. Price drifts back to 1.1020 and holds, with buyers stepping in.
The old ceiling has become a floor. A trader buys there with the stop just under the zone at 1.0990, so if the floor fails, the idea is clearly wrong.
Common mistakes
- Drawing so many lines the chart is covered.
- Expecting price to turn at one exact price.
- Ignoring the big levels from the daily chart.
- Trading a “break” on a wick before any candle has closed beyond the level.
Check yourself
1. Why draw zones rather than single lines?
Price rarely turns at exactly the same price, so a zone covers where the reaction really happens.
2. Resistance breaks with a strong close above it. What does it often become?
Support.
3. Which timeframe should you start on when marking levels?
A bigger one, such as the 4-hour or daily.
Try it on BTM
For education only, not financial advice. Trading carries a high risk of losing money, especially with leverage. Only trade with money you can afford to lose.
For educational purposes only. Nothing here is financial advice. Past performance does not guarantee future results, and trading carries a high risk of losing money, so only trade with money you can afford to lose. Read the risk warning.