20d โข Beginner Trading Education
Support and Resistance
๐ Support & Resistance Explained
Support and resistance are key price levels on a chart where the market tends to react. These levels form because of buying and selling behavior.
๐ฝ Support (Floor)
Support is a price level where the market stops falling and starts bouncing up.
- It forms because buyers step in at that level
- Demand is strong enough to hold price up
- Think of it as a floor under price
๐ When price comes back to support, traders look for buying opportunities
๐ผ Resistance (Ceiling)
Resistance is a price level where the market struggles to go higher and often reverses down.
- It forms because sellers step in
- Supply is strong enough to push price down
- Think of it as a ceiling above price
๐ When price reaches resistance, traders look for selling opportunities
๐ Why They Work
Support and resistance exist because of:
- Psychology (traders remember levels)
- Order flow (buyers and sellers stacked at prices)
- Previous reactions (price tends to repeat behavior)
๐ Role Reversal (Important Concept)
When a level breaks:
- Old resistance can become new support
- Old support can become new resistance
๐ This is one of the most powerful concepts in trading
๐ How to Identify Them
- Look for areas where price reacted multiple times
- Use horizontal lines, not exact prices (zones > lines)
- Focus on: Previous highs (resistance) Previous lows (support)
โ ๏ธ Key Tip
Support and resistance are not guaranteed to hold.
They are areas of probability, not certainty.
๐ก Final Thought
Support and resistance help you understand where the market is likely to reactโnot predict the future, but stack probabilities in your favor.
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Support and Resistance
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