Analysis
Support & resistance
Price areas where buying or selling has repeatedly halted a move.
Support is an area where buying has repeatedly been strong enough to stop a fall; resistance is where selling has repeatedly stopped a rise. They work because of memory: traders who bought there defend it, traders who missed it wait for a retest, and trapped traders want out at break-even.
Levels are zones rather than exact prices, and the strongest ones were touched more than once, produced sharp reactions, and are visible on a higher timeframe. Broken resistance that price holds above frequently becomes support on the retest.
Taught in these lessons
- Support, resistance & levels — Charts & Execution
- Placing a stop that makes sense — Risk & Position Sizing
- Writing a trading plan — Strategy & The Journal
- Building a routine that lasts — Psychology & Longevity
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