Support, Resistance & Trends

Support and Resistance

Support and resistance are price levels where buying or selling pressure historically appears, causing price to reverse or pause.

Support

A price level where buying interest prevents further decline. Think of it as a "floor." The more times price bounces from a level, the stronger that support.

Resistance

A price level where selling pressure prevents further rise. Think of it as a "ceiling." Previous highs often become resistance.

Role Reversal

When support breaks, it often becomes resistance. When resistance breaks, it often becomes support. This is a key concept for finding entries.

Trend Analysis

A trend is the general direction price is moving. Trading with the trend increases your probability of success.

Uptrend

Series of higher highs and higher lows. Focus on buying pullbacks.

Downtrend

Series of lower highs and lower lows. Focus on selling rallies or staying out.

Sideways/Range

Price moves between support and resistance with no clear direction. Trade bounces or wait for breakout.

Chart Patterns