Support is a price area where buying has repeatedly stopped a decline. Resistance is an area where selling has repeatedly stopped a rally. They work because traders remember them: those who missed the last bounce wait to buy there again.

Drawing levels

1. Start on a higher timeframe (daily or 4-hour).
2. Mark obvious turning points where price reversed sharply.
3. Draw zones, not razor-thin lines. Price rarely turns at the exact same pip.
4. Prefer levels touched several times, and levels where a big move started.
5. Round numbers (1.1000, 2,600 on gold) often act as levels on their own.

Role reversal

When resistance breaks, it often becomes support on the way back down, and vice versa. Traders who sold at resistance and were stopped out may buy the retest; traders who missed the breakout get a second chance.

Trading the levels

• Bounce: buy at support with a stop below the zone, targeting the next resistance.
• Break and retest: wait for a level to break, then trade the retest from the other side.

Common mistakes

• Placing the stop exactly at the level, where everyone else's stops are.
• Drawing so many lines that every price is a level.
• Ignoring the trend: buying at support in a strong downtrend is fighting the current.