Module 02 · Reading the Chart

2.5Support and Resistance

What you will learn

·What support and resistance represent
·Why levels are zones rather than exact lines
·What evidence makes a level meaningful

Core content

Support is an area where buying interest has previously appeared.

Resistance is an area where selling interest has previously appeared.

Support and resistance should generally be considered zones, not perfect mathematical lines. Look for:

·repeated reactions
·previous highs
·previous lows
·consolidation areas
·breakout levels
·rejection areas

TLHQ insight

Levels are areas of behaviour, not lines of magic.

Example

A level touched three times with visible rejection each time carries more evidence than a line drawn from a single wick.

Examples use historical or illustrative data only. They are not live market signals.

Apply it

Using a historical chart, mark: support, resistance, a breakout, a failed breakout, and a continuation.

Knowledge check

Check 01 · choice

Support and resistance are best treated as:

Check 02 · choice

Which is the strongest evidence for a level?

Key takeaways

01Support and resistance reflect prior participant behaviour.
02Draw zones, not lines.
03Repeated reaction is the primary evidence.

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Educational content only. Nothing here is financial advice or a recommendation to trade. Trading involves risk of loss, results vary between individuals, and past performance does not indicate future results. Only capital you can afford to lose should be exposed to market risk.