ForexSupport and resistance in forex: finding and using levels
Support is a price area where falling prices have tended to stop, and resistance is where rising prices have tended to stall. They form because many traders watch and act on the same levels.
How to find levels
Swing highs and lows: points where price turned more than once.
Round numbers: levels such as 1.1000 or 150.00 attract orders.
Previous day, week and month highs and lows.
Moving averages, which some traders treat as moving support and resistance.
Treat levels as zones a few pips wide, not exact lines. Price often overshoots slightly before turning.
When levels flip
When price breaks clearly through resistance, that level often becomes support on the way back down, and broken support often becomes resistance. Traders call this a role reversal or retest.
How strong is a level?
A level that has been tested several times, on higher timeframes, and lines up with a round number is watched by more traders. But each test can also absorb the orders resting there, so a level touched many times can eventually break.
Common mistakes
Frequently asked questions
How do I draw support and resistance?
Mark prices where the market has turned more than once, starting on the daily chart. Draw zones a few pips wide rather than single lines.
What happens when support breaks?
Broken support often becomes resistance when price returns to it. Traders call this a role reversal or retest.
How many times can a level be tested?
There is no fixed number. Repeated tests show the level matters, but each test can absorb the orders there, so a level can eventually give way.