How do I draw support and resistance?

Look for prices where the market has repeatedly turned. Connect two or more highs to mark resistance, and two or more lows to mark support. Treat them as zones rather than exact lines, since price rarely respects a level to the pip.

Do support and resistance levels always hold?

No. They show where price has reacted before, not a guarantee it will again. Levels break regularly, which is why traders use stop-losses just beyond them and watch for breakouts rather than assuming a level will always hold.

A breakout is when price decisively pushes through a support or resistance level rather than bouncing off it. Breakouts can signal the start of a strong move, though false breakouts, where price pokes through then reverses, are common.

What is role reversal?

Role reversal is when a broken level switches function: former resistance becomes new support, and former support becomes new resistance. It happens because traders who watched the old level now defend it from the other side.

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Strategy · Levels

Support and Resistance Explained

Support and resistance are the most useful lines on any chart. Learn what they are, why they work, and how traders use them to time entries and exits.

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If you learn only one piece of chart analysis, make it support and resistance. These levels mark where the balance between buyers and sellers has repeatedly shifted, and they underpin almost every trading strategy built on price.

What is support?

Support is a price level where falling prices have tended to stop and bounce back up. It marks a zone where buyers have repeatedly stepped in strongly enough to halt a decline. The more times price bounces from a level, the more significant that support becomes.

What is resistance?

Resistance is the mirror image: a level where rising prices have tended to stall and turn back down, as sellers step in. Support sits below the current price; resistance sits above it.

Why do these levels form?

Levels form because traders remember them. Round numbers, previous highs and lows, and prices where big moves began all attract attention. When enough traders act at the same level, their combined buying or selling makes the level self-fulfilling.

Role reversal

One of the most useful ideas: once a level breaks, it often swaps roles. Broken resistance frequently becomes new support, and broken support becomes new resistance. Watching for this flip is a core part of many strategies.

How traders use the levels

Buying near support and selling near resistance, expecting a bounce.
Trading a breakout when price decisively pushes through a level.
Placing stop-losses just beyond a level to limit risk if it fails.

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A note on risk
This guide is for educational purposes only and is not financial advice. Trading forex and CFDs carries a high level of risk and can result in the loss of all your capital. Most retail investor accounts lose money. Make sure you understand the risks and seek independent advice if needed before trading.