Support and Resistance
Price never wanders randomly — it bounces between a floor and a ceiling. Learn to spot these two levels and the whole chart starts to make sense.
Price has a floor and a ceiling
Watch any chart long enough and you'll notice price doesn't wander randomly. It keeps bouncing off certain levels — like a ball in a room with a floor and a ceiling. Traders call these support and resistance, and they're the two most-watched lines in all of trading.
Support is the floor — a price level where buyers keep stepping in and stop it falling further. Resistance is the ceiling — a level where sellers keep appearing and stop it rising further.
Support is where buyers defend. Resistance is where sellers attack.
Why traders care so much
- They're decision points. Near support, buyers feel safer; near resistance, sellers get ready. Levels are where the action happens.
- A "break" is a signal. When price punches through resistance or falls through support, it often keeps going that way — the room just got a new floor or ceiling.
- They flip roles. Once broken, old resistance often becomes new support — the ceiling becomes the floor.
Support and resistance are zones, not exact prices. Price will often poke slightly past a level (a "fakeout") before reversing — this is where beginners get trapped placing orders at the precise line. Treat levels as areas, give them breathing room, and never assume a level will hold just because it held before.
Support is the floor where buyers defend and resistance the ceiling where sellers attack — price bounces between them until one breaks, and broken levels often swap roles.
