Level 2 · Lesson 8 / 15 · English
Support and Resistance
3 min reading · Exercises take additional time
0 of 15 lessons completed for this visit
Support is an area where earlier selling met enough buying interest for price to stabilise or rise. Resistance is an area where an advance previously stalled. These are historical reaction zones, not walls or guaranteed order books.
What you will learn
- Mark reaction zones rather than magic lines
- Describe possible role reversal
- Set an invalidation rule
Illustrative educational chart · Not live market data
Draw zones from repeated evidence
Mark prior comparable swing reactions and specify the interval, number of touches and zone width. Price rarely stops at exactly the same decimal. A zone too wide is unfalsifiable; one too narrow can misclassify ordinary noise. Avoid adding a new line for every small move until any outcome appears predictable.
Reactions and role changes
A former resistance area may later coincide with support after a break, but role reversal is a scenario to test, not a universal law. A retest may never occur. A touch can lead to a bounce, a pause or a break. Volume from one venue does not reveal every pending Forex order at the level.
Include execution and invalidation
A stop beyond a zone may still slip during a gap; a target at the zone may not fill on a chart touch. Define whether the study uses closes or extremes and which quote side. Calculate position size from the planned adverse distance, not from the conviction that the zone must hold.
Key terms
- Support
- An area of earlier downward-price reactions.
- Resistance
- An area of earlier upward-price reactions.
Hypothetical worked example · Not live market prices
Worked chart study · Support and Resistance
- Prior reactions occur at 1.1000, 1.1005 and 1.0998.
- An illustrative support zone 1.0995–1.1005 includes these reactions.
- A close at 1.0985 is outside that zone and challenges a holding scenario; future recovery is still possible.
| Observation | Illustrative value / meaning |
|---|---|
| Reaction lows | 1.1000 / 1.1005 / 1.0998 |
| Study zone | 1.0995–1.1005 |
| Outside close | 1.0985 |
Simplified educational calculations. Costs, slippage and provider-specific adjustments apply where relevant; these are not actual returns.
Common mistakes to avoid
- Changing the stated chart rule after seeing the outcome instead of recording a new test.
- Treating a historical description as a guaranteed future result or ignoring execution costs.
- Skipping the timeframe, source or invalidation condition before drawing a conclusion.
Lesson summary
Support is an area where earlier selling met enough buying interest for price to stabilise or rise. Resistance is an area where an advance previously stalled. These are historical reaction zones, not walls or guaranteed order books. Use an explicit rule, consider contrary evidence and practise without risking real money.
Practical exercise
Draw a support zone from three reactions and give an objective rule for a failed bounce. Record a scenario in which you take no trade.
Knowledge check
Check your understanding
Results apply to this attempt only and are not saved to a student account. No certificate is issued.
Answer all questions correctly and complete the exercise. Progress follows you between Academy pages for this visit only; it is not saved to an account and resets on reload.
Related lessons
Financial education, not personal investment advice. Leveraged Forex and CFDs can lead to substantial losses. Demo practice and correct quiz answers do not guarantee trading success.