Support is a price zone where buying pressure is strong enough to halt a decline. Resistance is a price zone where selling pressure is strong enough to halt a rally. Understanding S/R is fundamental to setting entry, exit, and stop-loss levels.
Previous highs become natural resistance; previous lows become natural support. Once a resistance level is broken and held, it transforms into new support (support/resistance flip).
MA20 and MA60 are the most important dynamic S/R levels. In uptrends, pullbacks to MA20 often find support; in downtrends, bounces to MA60 often meet resistance.
Prices like $100, $200, $500 create natural S/R due to psychological effects.
Heavy past trading at a price zone = large number of trapped positions. These act as resistance when approached from below (holders selling to break even), but flip to support once decisively broken.
Connecting two or more swing lows creates an uptrend support line. The longer the trendline and the more times it's tested, the more significant it becomes.
Not necessarily. Check volume — a breakdown on low volume is more likely a false break. Focus on closing prices, not intraday touches.
Better to wait for the first pullback to confirm the former resistance now acts as support, then enter. Higher probability and safer.
More tests = stronger. Volume-cluster support is stronger than a simple swing low. Confluence of multiple supports (previous low + MA60 + round number) creates the strongest support zones.