Technical Analysis

Support & Resistance | Beginner’s Guide

Hi Everyone, 

This is a basic guide on how to take trade based on Support and Resistance levels. Before wasting any further time, let’s dive straight into what these terms actually mean.

Support is a level where a downtrend is expected to stop. These are the price levels where we’ve witnessed intense buying pressure in the past. 

Similarly, Resistance is a level where expect uptrend to stop. These are the price levels where we’ve witnessed intense selling pressure in the past. 

There are different types of Support and Resistance levels. In this article, we’ll cover the below mentioned: 

  • Horizontal Support
  • Horizontal Resistance
  • Trending Support
  • Trending Resistance
  • Support becomes Resistance
  • Resistance becomes Support
  • Support Breakouts
  • Resistance Breakout 

Horizontal Support


This means that the Demand is more at this 1 $ price than the actual Supply 

Horizontal Resistance

This means that the Supply is more at this 1 $ price level than actual Demand.

Gap Analysis between Support & Resistance

The gap between these points of support and resistance should be minimum 5 — 8 candles.

Non-Support Line

This Line can’t be called Support because there is no bounce from this line.

This suggests that there is not much going on in terms of buying and selling in this asset and there is no demand. This usually happens after a long bearish continuation.

Non-Resistance Line

This Line can’t be called Resistance because there is no bounce from this line. 

This suggests that there is not much going on in terms of buying and selling in this asset and there is no Supply or demand. These moves are seen often after long bullish continuation.

Trending Support ( Bullish Trend )

When Price falls to a certain level and moves up and again falls down and moves up by creating a higher low, now if we are able to draw a line connecting those lows just like shown in the above image then we call it a trending support. This is sign of a Bullish Trend (Bullish Continuation).

Trending Resistance ( Bearish Trend )

When Price falls to a certain level and moves up and again falls down and moves up by creating a higher low, now if we are able to draw a line connecting those lows just like shown in the above image then we call it a trending support. This is a sign of a Bearish Trend (Bearish Continuation). 

Support becomes Resistance

This happens when price finds support at a certain price level and after testing it multiple times, it finally breaks below and goes down. It is then reversed by buying pressure but fails to go back above which was previously a support and comes down again. In this scenario, we say that Support has now become Resistance.

Resistance becomes Support

This happens when price finds resistance at a certain price level and after testing it multiple times, it finally breaks out and goes up. It then reverses under selling pressure but fails to move back below which was previously a resistance line and bounce back up. In this scenario, we say that the Resistance has now become Support. 

Support Breakouts

This happens when the price breaks below the support line with volume and closes there. This suggests a bearish continuation trend. 

Resistance Breakouts

This happens when the price breaks below the support line with volume and closes there. This suggests a bearish continuation trend.

I hope you found what you were looking for in this post, If you’ve any other query, you can let me know in the comment section below.

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