Glossary
Support & Resistance
Price levels where buying or selling has repeatedly stepped in — floors and ceilings on the chart.
Support & Resistance, explained
Support is a level where buying has historically been strong enough to halt declines (a floor); resistance is where selling has halted advances (a ceiling). They mark the prices at which the balance between buyers and sellers has shifted before.
These levels work partly because they are self-fulfilling — traders watch the same obvious prices and act there — and partly because they coincide with resting liquidity. A broken support often flips to become resistance, and vice versa, because the orders and expectations clustered there simply change sides once price trades through.
It pays to treat support and resistance as zones, not razor-thin lines. Price rarely respects an exact price to the pip; it reacts within a band around the level. Drawing a tight line and expecting a perfect bounce leads to stops placed too close and entries that get faked out by normal overshoot.
Support and resistance are the retail-friendly version of the same idea SMC refines with liquidity and order blocks: the difference is that SMC focuses on what happens at and just beyond those levels rather than treating them as simple lines. The obviousness of a level is precisely why price often sweeps just past it before reversing.
On the desk we use major support and resistance for context and targets, but we expect the precise turn to come slightly beyond the level, after the obvious stops there are taken. That is why we pair the classic level with a liquidity sweep rather than buying the line blindly.
Frequently asked questions
- Why does support turn into resistance?
- Once price breaks below support, the buyers who defended it and the orders clustered there shift sides. On the return, that old floor becomes a ceiling, as trapped buyers exit and new sellers lean against it.
- Should support and resistance be a line or a zone?
- A zone. Price reacts within a band around the level, not at an exact price. Treating it as a thin line leads to stops set too tightly and entries faked out by the normal overshoot around the level.
Related terms
Supply & Demand
Zones where institutional selling (supply) or buying (demand) overwhelmed the other side and moved price.
ReadLiquidity
The pools of resting orders price is drawn toward — typically clustered above highs and below lows.
ReadRange
A market moving sideways between a defined support floor and resistance ceiling.
ReadPremium & Discount
Whether price is expensive or cheap relative to the midpoint of a range — buy in discount, sell in premium.
Read
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