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SUPPORT and RESISTANCE
When prices fall to a certain level over a series of trading sessions, stabilize and then rally higher, the level to
which they fell is known as support and it has technical significance. A price level of support that held on one occasion
is likely to hold again in the future, thus providing a buy entry point for the technical trader using a strategy based on a price
channel or price range, while a decisive movement down and through a level of support is often accompanied by an
aggressive downward continuation, thus providing a sell entry point for a break-out trading strategy.
Support levels are widely apparent in price charts across markets and even across time frames, for example, in daily,
weekly and monthly price charts and even in intra-day price charts such as a 30-minute bar chart.
When prices rally to a certain level over a series of trading sessions, stabilize and then fall back, the level to
which they rose is known as resistance and it, too, has technical significance. A price level of resistance that held on one occasion
is likely to hold again in the future, while a decisive movement up and through a level of resistance is often accompanied by an
aggressive upward continuation.
Like support levels, resistance levels are widely apparent in price charts across markets and across time frames.
For more information, please view the video at right. It's free and no registration is required.
You may also want to try a free 30-day trial
of PivotFarm's Technical Analysis Data Sheets
that provide professional level support and resistance-based research using over 10 different identification methods.
Our futures trading course called Commodity Trading as a
Second IncomeTM teaches a trading system that uses, as a signal generator, a break-out of prices
from an identified level of support or resistance.
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Click above to watch a free 20-minute video (no registration required) that explains levels of
support and resistance on a price chart for various markets and then shows how these levels can be
used to generate break-out trading signals. Generating trading signals in this manner is employed in the
trading system taught in our futures trading course for beginners called, Commodity Trading as a Second Income.
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Keywords: support and resistance, support resistance, price support, chart support, support level, resistance level, price resistance, break-out trading, breakout trading
Abstract: Explains support and resistance price levels and shows how they can generate break-out trading signals.
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