Free Trading School · Level 4: Reading Charts
Support and resistance
Support is a price area where buying has repeatedly stopped a decline. Resistance is an area where selling has repeatedly stopped a rally. These levels form because traders remember them: people who missed buying at a level are waiting to buy there again.
Price bouncing between support (green) and resistance (red).
- The more times a level holds, and the higher the timeframe, the more important it is.
- Levels are zones, not exact lines. Give them a little room.
- When resistance breaks, it often becomes support later, and vice versa (a "role reversal").
- Round numbers such as $100 or 1.1000 often act as levels too.
Look for trades at the edges, near support or resistance, not in the middle where price can go either way.
Quick answers
Support is a price area where buying has repeatedly stopped a decline. Resistance is an area where selling has repeatedly stopped a rally. These levels form because traders remember them: people who missed buying at a level are waiting to buy there again.
Look for trades at the edges, near support or resistance, not in the middle where price can go either way.
Checking the trend on a higher timeframe and timing entries on a lower one. Start from the big picture, then zoom in for the entry.
Next lesson: Order types