Chart pattern
Support and Resistance explained
Support is a price area where buying has repeatedly slowed or reversed a decline. Resistance is an area where selling has repeatedly slowed or reversed a rise. They are zones, not exact lines, and they are the base for most other chart patterns.
How to spot it
- Mark obvious swing highs and lows on a higher timeframe first.
- Look for areas where price reacted more than once, such as repeated turns or rejections.
- Draw a zone that covers the wicks and closes, not a single thin line.
- Note when a broken level flips role: old support becoming resistance, and the reverse.
What invalidates it
A level is weakened when price closes through it with momentum and then holds on the other side, or when a retest fails to bounce.
Common mistakes
- Drawing too many lines, so every price looks like a level
- Using exact lines instead of zones
- Ignoring higher-timeframe levels
- Assuming a level will hold because it has before
Questions
- Why do support and resistance levels work?
- They reflect where many traders have placed orders or made decisions. Because many people watch the same levels, they can influence behaviour, but nothing forces price to respect them.
- Which timeframe should I use for levels?
- Start on a higher timeframe, such as the daily, then refine on the one you trade. Higher-timeframe levels tend to carry more weight.
- What is a false breakout?
- Price moves beyond a level and then quickly returns inside. It is common and is why many traders wait for a close or a retest.
Related patterns
See how patterns are applied to a specific instrument in the market guides.
Educational content, not financial advice. Chart patterns describe what price has done and do not predict what it will do next.
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