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Support and resistance are the first things most traders look for on any price chart. They describe where price has turned before. They don’t say where it will turn next.

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What

A level is a price where the market turned more than once. Support is a level where lows cluster: price fell to it, and buyers stepped in each time. Resistance is a level where highs cluster: price rose to it, and sellers stepped in each time. A level comes from the past. The more often price has stopped in the same area, the clearer the level looks on the chart.

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Read

More touches, more eyes on it. A level that has held three times is on more screens than one that has held once, and traders often read it as the stronger level. One classic reading is the flip. Price breaks cleanly through a level, then comes back to test it from the other side. Old support tested from below is read as new resistance, and old resistance tested from above is read as new support. For example, a price falls to the same area three times in a session and bounces each time. Later it drops through that area and closes below it. When it climbs back and stalls at the same area, traders often read that as the flip: the old floor is now a ceiling.

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Watch

Watch where the bar closes relative to the zone, not where its wick reached. A wick that pokes through a level and closes back inside it is often read as a test that held. A close beyond the level is the stronger signal.

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Caveat

A level is a zone, not a line. Price rarely turns at exactly the same number twice, so give the level some width. On a one-minute chart, draw levels through swing points, not through every wick. A swing point is a clear turn in price, with bars on both sides that didn’t reach as far. Wicks are the stray prints between those turns, and a level drawn through every one of them is not a level. A pattern describes what price has done. It doesn’t say what price will do next.
  • Trendline: a line through swing lows or swing highs, extended to the right.
  • Channel: a trendline with a parallel line on the other side.
  • Box: sideways price between a level above and a level below.