Trading glossary
What is support and resistance?
Support is a price area where falling price has repeatedly stopped; resistance is an area where rising price has repeatedly stopped.
Support and resistance are price areas where the balance between buyers and sellers has shifted before. At support, enough buying appeared to stop a decline. At resistance, enough selling appeared to stop a rally.
They are areas rather than exact prices. A level that has been tested several times, or that marks a major swing high or low, is usually treated as more significant than one touched once.
When a level breaks decisively, it often swaps roles: old resistance can act as support on a retest, and old support as resistance.
How traders use it
- Mark the most recent clear swing highs and lows before anything else.
- Treat a level as a zone a little wider than a single price, because wicks often overshoot.
- Use the nearest level on the far side of a trade idea as its invalidation.
Example
EURUSD falls to 1.0800, bounces, falls to 1.0805 a week later and bounces again. The 1.0800 to 1.0805 area is now support. If price later closes at 1.0770, many traders expect 1.0800 to act as resistance on the way back up.
Frequently asked questions
How many times does a level need to be tested?
Two clear reactions is a common minimum. More tests make the level more visible, but each test can also absorb orders and make a break more likely.
Can AI find support and resistance?
It can identify the swing highs and lows on a chart image and the areas where price reacted repeatedly. The levels still need to be judged in context, which is why Analytix-AI pairs each one with the scenario it supports.
Related terms
Related patterns
Educational content only, not financial advice. Chart patterns describe probabilities, not certainties, and every pattern can fail. See our disclaimer.