Support and resistance lines
Places price has already turned from. Everyone sees them — which is why price comes there first.
Support and resistance lines — what it is?
Support is a level price has already turned up from. Resistance is a level it turned down from. There's no magic in it and it's not a property of price itself: these are places where large orders once sat.
Something else matters more. Everyone sees the level, so stop losses pile up beyond it: buyers' stops below support, sellers' stops above resistance. The level becomes a target, not a barrier.
Hence the practical conclusion: the more obvious a level is, the higher the chance it gets pierced first. That's exactly what makes classical technical analysis predictable — and therefore dangerous for anyone trading it head-on.
Support and resistance lines — how it is built?
The line is drawn on the full range of the candles — on highs and lows, wicks included. Two touches are enough, the third confirms. Only a candle closing beyond the level counts as a break; a wick piercing it does not.
Support and resistance lines — common mistakes
Drawing the level by candle bodies and ignoring the wicks. Liquidity sits precisely beyond the extremes.
Counting a wick piercing as a break. Without a close beyond the level it's more often a liquidity grab than a break.
Drawing a dozen levels. Two or three obvious ones work, the rest is noise.
Entering exactly at the level, with no zone and no confirmation.
Related to
Glossary
- support
- a level price has previously bounced up from.
- resistance
- a level price has previously bounced down from.
- stop-loss
- an exit level set in advance for a losing trade.
- range
- movement inside a horizontal corridor with no clear direction.
- candle
- the element of the chart that shows four prices for a period: open, high, low, close.
- wick
- the thin lines above and below the body that show the high and the low of the period.
Test yourself
Where did the breakdown happen — price closed below the level?
Correct. The app has tasks like this in every lesson — 119 lessons on real charts. Solve in the app →
Not this one. The right answer is the other chart. The app has tasks like this in every lesson — 119 lessons on real charts. Solve in the app →