Support and resistance
Prices that have mattered before
What it is
Levels where price previously stalled or reversed. Support sits below and has attracted buying; resistance sits above and has attracted selling.
What it may suggest
Areas where a reaction is more likely, and where a stop has a logical home just beyond.
Where it fails
Zones, not lines. Expecting a reaction to the cent leads to being stopped by a wick. And every level eventually breaks; the question is only which one.
Also called support, resistance, key levels, support level, resistance level.
More concepts
- Trend structureHigher highs and higher lows, or the reverse
- Breakout and retestPrice clears a level, then comes back to it
- InvalidationThe price that proves you wrong
- Risk-to-rewardDistance to target versus distance to stop
- Position sizingHow much, given where the stop is
- Liquidity sweepA push through an obvious level, then straight back
ChartPeak is an educational tool. It is not financial advice and does not make investment recommendations. Trading carries a risk of loss, and past performance does not indicate future results. Do your own research.
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