What Are Support and Resistance?

Support is a price zone where buying interest tends to emerge, slowing or reversing downward movement. Resistance is where selling interest tends to emerge, slowing or reversing upward movement. These are not exact lines — they are zones where the market has previously agreed that price was cheap (support) or expensive (resistance).

Levels form because traders remember prior prices. Someone who bought at a swing low may defend that area again. Someone who sold at a swing high may sell again when price returns. Institutional orders and large resting liquidity also cluster at obvious chart points, reinforcing these zones.

The more times price tests a level without breaking through, the more visible it becomes — but also the more likely it eventually breaks when liquidity is consumed. Fresh levels from recent swing points often produce sharper reactions than old levels tested many times.

Support can become resistance after a break (and vice versa). When price breaks below support and later rallies back to that zone, former buyers may sell to exit at breakeven, turning support into resistance. This role reversal is a core manual trading concept.

Draw zones, not razor-thin lines. A cluster of wicks or a consolidation base is more honest than a single tick. Your entries and stops should respect the zone width, especially on volatile assets.