You're looking at a chart. Price is bouncing around randomly. You can't figure out where to enter. You can't figure out where to exit. You're guessing.
So you buy. Price immediately hits an invisible wall and drops. You get stopped out.
Then you sell. Price immediately bounces off another invisible floor and rallies. You get stopped out again.
Twice in one hour. You're down 2%.
Here's what you didn't see:
The first "invisible wall"? A major resistance level from 3 months ago.
The second "invisible floor"? A key support level from 6 weeks ago.
These levels were right there on your chart. Plain as day.
You just didn't know how to spot them.
Support and resistance are the foundation of all technical analysis. Every profitable trader uses them. Professional algorithms trade off them. Institutional orders sit at them.
Most retail traders ignore them. And lose.
Let's fix that. Here's how to trade support and resistance like a pro in 2026.
What Is Support and Resistance? (The Simple Explanation)
Support: A price level where buying pressure overcomes selling pressure. Price bounces up.
Resistance: A price level where selling pressure overcomes buying pressure. Price drops down.
Think of it like a floor and a ceiling:
- Support = Floor. Price hits it and bounces up.
- Resistance = Ceiling. Price hits it and drops down.
Why it works:
At support levels, buyers see value. They step in. They buy. Price bounces.
At resistance levels, sellers see overvaluation. They step in. They sell. Price drops.
Self-fulfilling prophecy:
When thousands of traders, algorithms, and institutions are all watching the same level at $150, and price approaches it...
Buyers will defend it. Sellers will attack it.
The battle creates the support or resistance.
And you can see it coming.
The 6 Types of Support and Resistance You Must Know
Type #1: Horizontal Support and Resistance
What it looks like:
- A horizontal price level where price has reversed multiple times
- Price touches the level, bounces, touches again, bounces again
How to identify:
- Look for areas where price has reversed at least twice
- The more times price touches the level, the stronger it is
- 2 touches = potential level
- 3+ touches = major level
Example:
AAPL has reversed at $180 four times over the last 3 months:
- February: Bounced at $180.10
- March: Dropped from $180.20
- April: Bounced at $179.90
- May: Dropped from $180.05
$180 is now a major support/resistance level.
Why it works:
- Traders remember these levels
- They buy at support, sell at resistance
- Algorithms have orders programmed at these levels
- Self-fulfilling prophecy
How to trade it:
- Buy when price drops to support and shows rejection
- Sell when price rallies to resistance and shows rejection
Type #2: Trendline Support and Resistance
What it looks like:
- A diagonal line connecting swing lows in an uptrend (support)
- A diagonal line connecting swing highs in a downtrend (resistance)
How to draw an uptrend support line:
- Identify 2 swing lows (higher lows)
- Draw a line connecting them
- Extend the line forward
How to draw a downtrend resistance line:
- Identify 2 swing highs (lower highs)
- Draw a line connecting them
- Extend the line forward
Example:
NVDA uptrend:
- Swing low 1: $420 (March)
- Swing low 2: $440 (May)
- Draw trendline connecting these lows
- Price drops to trendline in July at $470
- Bounces off trendline, rallies to $520
Why it works:
- Trends don't move in straight lines
- They pull back to trendlines and then resume
- Traders buy dips to trendline support in uptrends
- Traders sell rallies to trendline resistance in downtrends
Key rule: A trendline needs at least 2 touches to be valid. 3+ touches makes it strong.
How to trade it:
- In uptrend: Buy pullbacks to trendline support
- In downtrend: Sell rallies to trendline resistance
Type #3: Moving Average Support and Resistance
What it looks like:
- Price bouncing off a moving average (usually EMA 20, EMA 50, or SMA 200)
- The MA acts as dynamic support/resistance
How it works:
- In uptrends, the EMA 50 acts as support. Price pulls back to it, bounces, resumes uptrend.
- In downtrends, the EMA 50 acts as resistance. Price rallies to it, rejects, resumes downtrend.
Example:
TSLA in uptrend:
- Price trading above EMA 50
- Price pulls back to EMA 50 at $240
- Shows rejection candle (wick below EMA)
- Bounces, rallies to $275
Why it works:
- Many traders use these MAs
- Institutions watch these levels
- Algorithms trade off these levels
- Self-fulfilling prophecy
Which MAs to use:
- Short-term: EMA 20
- Medium-term: EMA 50
- Long-term: SMA 200
How to trade it:
- Only in the direction of the trend (determined by the MA slope)
- Buy pullbacks to EMA 20 or 50 in uptrends
- Sell rallies to EMA 20 or 50 in downtrends
Type #4: Fibonacci Support and Resistance
What it looks like:
- Horizontal lines drawn at Fibonacci retracement levels
- Most common: 38.2%, 50%, 61.8%
How to draw:
- Identify a swing high and swing low
- Draw Fibonacci from low to high (for uptrend) or high to low (for downtrend)
- The key retracement levels act as support/resistance
Example:
SPY rallies from $440 to $480:
- Swing low: $440
- Swing high: $480
- Draw Fibonacci from $440 to $480
- Key retracement levels:
- 38.2%: $465 - 50%: $460 - 61.8%: $455
Price pulls back to $460 (50% retracement), bounces, rallies to $490.
Why it works:
- Many traders use Fibonacci levels
- They represent mathematical ratios found in nature
- They represent "fair value" pullback zones
- Self-fulfilling prophecy
Most important level:
- 61.8% (the "golden ratio")
- Deep pullbacks often find support here
How to trade it:
- Wait for price to pull back to a Fib level
- Wait for a rejection signal (wick, doji, engulfing)
- Enter in the direction of the original trend
Type #5: Psychological Support and Resistance
What it looks like:
- Price levels ending in 00, 50, or 25
- Examples: $100, $150, $175, $200
How to spot them:
- Round numbers: $100, $150, $200, $250
- Half dollars: $50, $150, $250
- Quarter dollars: $25, $75, $125, $175
Example:
Bitcoin at $49,800:
- Approaches $50,000 (psychological resistance)
- Shows rejection at $49,950
- Drops to $48,200
Stock at $98:
- Approaches $100 (psychological resistance)
- Shows rejection at $99.80
- Drops to $95
Why it works:
- Human psychology: round numbers feel significant
- Traders set orders at these levels
- Institutions take profits at these levels
- Retail traders enter/exit at these levels
How to trade it:
- Be aware of psychological levels near your entry
- Expect reversals or consolidation at these levels
- Don't set targets exactly at these levels (price may reverse before hitting)
- Set targets just before psychological levels
Type #6: Volume Profile Support and Resistance
What it looks like:
- Horizontal lines showing price levels where high volume occurred in the past
- These levels act as strong support/resistance
How to identify:
- Use volume profile tool (available in most charting platforms)
- Look for "POC" (Point of Control) - the price level with highest volume
- Look for "VAH" (Volume Area High) and "VAL" (Volume Area Low)
Example:
AAPL shows high volume at $175:
- This level becomes strong support/resistance
- When price approaches $175, it often reverses
Why it works:
- High volume means many traders traded at that level
- Those traders have an emotional connection to that level
- They'll defend their positions if price returns
How to trade it:
- Identify high-volume nodes using volume profile
- Trade reversals at these levels
- Use in combination with other S/R types for confluence
The 5 Best Support and Resistance Strategies
Strategy #1: The Bounce Trade (Trading Reversals at S/R)
The Setup:
- Identify a strong support or resistance level (3+ touches)
- Wait for price to approach the level
- Wait for a rejection signal (wick, doji, engulfing)
- Enter in the direction of the bounce
Long Example (Support Bounce):
AMD approaches support at $120:
- Price has bounced off $120 three times in the last 2 months
- Price drops to $120.50
- Shows a hammer candle (long lower wick, small body)
- Enter long at $122
- Stop at $118 (below support)
- Target: $135 (previous resistance)
- Risk: $4. Reward: $13. R:R = 3.25:1
Short Example (Resistance Rejection):
META approaches resistance at $350:
- Price has rejected $350 four times in the last 3 months
- Price rallies to $349.50
- Shows a shooting star candle (long upper wick, small body)
- Enter short at $345
- Stop at $355 (above resistance)
- Target: $320 (previous support)
- Risk: $10. Reward: $25. R:R = 2.5:1
Why it works:
- You're trading at a level where price has historically reversed
- You're entering after confirmation (rejection candle)
- You're trading with the "memory" of the market
The key:
- Don't anticipate the bounce. Wait for confirmation.
- The rejection candle confirms that buyers/sellers are defending the level.
Strategy #2: The Breakout Trade (Trading Momentum After S/R Break)
The Setup:
- Identify a strong support or resistance level
- Wait for price to break through the level with momentum
- Wait for a retest of the broken level
- Enter in the direction of the breakout
Long Example (Resistance Breakout):
GOOGL breaks through resistance at $140:
- $140 has been major resistance for 4 months
- Price breaks above $140 with high volume
- Pulls back to $140.50 (retest)
- Shows rejection wick at $139.80
- Enter long at $142
- Stop at $138 (below retest low)
- Target: $155 (measured move of previous range)
- Risk: $4. Reward: $13. R:R = 3.25:1
Why the retest works:
- Old resistance becomes new support
- Traders who shorted at resistance are now trapped
- They buy to cover when price retests
- This buying pressure pushes price up
Short Example (Support Breakdown):
COIN breaks through support at $80:
- $80 has been major support for 3 months
- Price breaks below $80 with high volume
- Rallies back to $80.50 (retest)
- Shows rejection wick at $81.20
- Enter short at $79
- Stop at $83 (above retest high)
- Target: $65 (measured move)
- Risk: $4. Reward: $14. R:R = 3.5:1
Why the retest works:
- Old support becomes new resistance
- Traders who bought at support are now trapped
- They sell to exit when price retests
- This selling pressure pushes price down
The key:
- Wait for the close beyond the level (fake breakouts are common)
- Wait for the retest (most breakouts retest)
- Enter on the rejection at the retest
Strategy #3: The Range Trade (Trading Between S/R Levels)
The Setup:
- Identify clear support and resistance levels
- Price is bouncing between them (ranging market)
- Buy at support, sell at resistance
Example:
SHOP is ranging between $60 and $70:
- Support: $60 (tested 4 times)
- Resistance: $70 (tested 4 times)
- Price drops to $60.50
- Shows rejection candle
- Enter long at $62
- Stop at $58 (below support)
- Target: $69 (just below resistance)
- Risk: $4. Reward: $7. R:R = 1.75:1
Then:
- Price hits target at $69
- Price approaches resistance at $70
- Shows rejection candle
- Enter short at $68
- Stop at $72 (above resistance)
- Target: $61 (just above support)
- Risk: $4. Reward: $7. R:R = 1.75:1
Why it works:
- Price is stuck between support and resistance
- No trend, just range-bound oscillation
- You're buying low, selling high
- Repeating the pattern until the range breaks
The key:
- Set targets just inside the range (not at the exact S/R level)
- Be ready for the breakout (ranges don't last forever)
- Stop trading the range when price breaks through support or resistance
Strategy #4: The Trendline Bounce Trade
The Setup:
- Draw a trendline connecting swing lows (uptrend) or swing highs (downtrend)
- Wait for price to pull back to the trendline
- Wait for a rejection signal
- Enter in the direction of the trend
Long Example (Uptrend Support):
MSFT in uptrend:
- Swing low 1: $360 (March)
- Swing low 2: $375 (May)
- Swing low 3: $385 (July)
- Draw trendline connecting the lows
- Price drops to trendline at $400 (September)
- Shows rejection wick at $398
- Enter long at $405
- Stop at $395 (below trendline)
- Target: $430 (previous high)
- Risk: $10. Reward: $25. R:R = 2.5:1
Why it works:
- Trendlines define the trend
- Traders buy dips to trendline support in uptrends
- Each successful touch strengthens the trendline
- Self-fulfilling prophecy
The key:
- Don't force trendlines. Let the market show you the trend.
- A trendline needs at least 2 touches. 3+ is better.
- When price breaks through a trendline with momentum, the trend may be ending.
Strategy #5: The Confluence Trade (Multiple S/R Types Align)
The Setup:
- Identify where multiple types of support/resistance align
- This creates a "confluence zone" - a high-probability reversal area
- Trade the reversal at the confluence zone
Example:
AMZN has confluence at $170:
- Horizontal support: Price has bounced at $170 three times
- EMA 50 support: EMA 50 is at $170.50
- Fibonacci support: 61.8% retracement at $170.20
- Psychological support: $170 is a round number
Four types of support align at $170. This is a confluence zone.
Price drops to $170.80:
- Shows rejection candle (hammer)
- All four support types align here
- Enter long at $172
- Stop at $167 (below confluence zone)
- Target: $190 (previous resistance)
- Risk: $5. Reward: $18. R:R = 3.6:1
Why it works:
- More S/R types aligned = stronger level
- Horizontal support + EMA support + Fib support = massive buying pressure
- All types of traders see this level
- Institutions, retail traders, algorithms - everyone is watching
The key:
- Don't trade single S/R types when you can trade confluence
- 2+ types aligning = good trade
- 3+ types aligning = excellent trade
- The more confluence, the higher the probability
How to Draw Support and Resistance Levels Correctly
Rule #1: Use Body, Not Wicks
Wrong: Drawing S/R at wick extremes
Right: Drawing S/R at candle bodies
Why:
- Wicks represent temporary spikes
- Bodies represent where price actually closed
- Bodies are more reliable
Example:
- Price dropped to $99.50 (wick low) but closed at $100.20 (body close)
- Draw support at $100, not $99.50
- The market rejected prices below $100, but accepted $100
Rule #2: Connect Reversals, Not Extremes
Wrong: Connecting the lowest lows or highest highs
Right: Connecting the reversal points (where price actually turned)
Why:
- Extremes are often fakeouts
- Reversal points show where buyers/sellers actually stepped in
Rule #3: More Touches = Stronger Level
Weak level: 2 touches Strong level: 3 touches Major level: 4+ touches
The more times price has tested a level, the stronger it is.
Rule #4: Fresh Levels Are Stronger Than Tested Levels
Fresh level: Price hasn't touched it in months Overtested level: Price has touched it 8+ times
Paradox: More touches usually = stronger level. But eventually, a level becomes overtested and breaks.
How to handle:
- 3-5 touches: Strong level, trade it
- 6-7 touches: Be cautious, level might be weakening
- 8+ touches: Level might break, don't trade it
Rule #5: Zoom Out Before Zooming In
Always check higher timeframes first:
- Weekly chart: Identify major S/R levels
- Daily chart: Identify medium-term S/R levels
- 4H chart: Identify short-term S/R levels
- 1H chart: Plan your entries
Never trade a support level on the 1H chart if there's a major resistance level on the daily chart just above it.
The 10 Support and Resistance Rules You Must Follow
Rule #1: Don't Anticipate Bounces
Wrong: Price is approaching support at $100. You buy at $101 because "it's going to bounce."
Right: Wait for price to hit $100. Wait for rejection candle. Then enter.
Anticipation gets you stopped. Confirmation makes you money.
Rule #2: Always Wait for Confirmation
Confirmation = A candlestick rejection pattern
Bullish confirmation at support:
- Hammer (long lower wick, small body at top)
- Bullish engulfing (green candle fully engulfs previous red candle)
- Morning star (three-candle reversal pattern)
Bearish confirmation at resistance:
- Shooting star (long upper wick, small body at bottom)
- Bearish engulfing (red candle fully engulfs previous green candle)
- Evening star (three-candle reversal pattern)
No confirmation = No trade.
Rule #3: Set Stops Beyond the S/R Level
Long trade at support:
- Stop goes below support
- Give the level some room (0.5-1% beyond the level)
Short trade at resistance:
- Stop goes above resistance
- Give the level some room (0.5-1% beyond the level)
If you're stopped out, the level is broken. Move on.
Rule #4: Set Targets at the Next S/R Level
Long trade:
- Target is the next resistance level
- Don't be greedy
- Take profit at resistance
Short trade:
- Target is the next support level
- Cover at support
- Don't be greedy
Markets move from S/R level to S/R level. Trade accordingly.
Rule #5: Broken Support Becomes Resistance
Price breaks below support at $100.
- Old support: $100
- New resistance: $100
- Price rallies to $100, rejects, drops
Trade the rejection when old support is tested as new resistance.
Rule #6: Broken Resistance Becomes Support
Price breaks above resistance at $150.
- Old resistance: $150
- New support: $150
- Price drops to $150, bounces, rallies
Trade the bounce when old resistance is tested as new support.
Rule #7: Trade Confluence, Not Single Levels
Single level: Horizontal support only
- Okay to trade, but not great
Confluence zone: Horizontal support + EMA 50 + Fib level
- Excellent trade
- Multiple types of S/R aligning
- Much higher probability
Always look for confluence.
Rule #8: Respect Higher Timeframe Levels
Daily chart support at $100. 4H chart resistance at $102.
You want to go long on the 4H chart.
Check the daily chart first.
If daily support at $100 is close, your 4H long trade has limited upside (daily resistance at $105).
But if daily support is far away (at $90), your 4H long has more room to run.
Always check higher timeframes.
Rule #9: Don't Trade S/R in Strong Momentum
Price is crashing down. No bounces.
You see support at $100.
Don't buy.
Why:
- Strong momentum breaks through S/R levels
- Wait for the momentum to slow
- Wait for price to actually test the level
- Wait for rejection
Momentum > Support/Resistance.
Rule #10: S/R Works Best in Ranging Markets
Ranging market: Price bouncing between support and resistance
- Perfect for S/R trading
- Buy support, sell resistance
- Repeat until range breaks
Trending market: Price making higher highs and higher lows
- Use pullback S/R trading (buy dips to support)
- Don't short resistance in a strong uptrend
- Don't buy support in a strong downtrend
Match your strategy to market conditions.
Common Support and Resistance Mistakes to Avoid
Mistake #1: Drawing Too Many Levels
Your chart has 20 support and resistance lines.
You can't tell which ones matter.
Fix: Only draw major levels (3+ touches). Keep it clean.
Mistake #2: Trading Every Level
Support at $100. Support at $98. Support at $95.
You buy at every level.
Fix: Only trade the strongest levels. 3+ touches. Confluence zones.
Mistake #3: Not Adjusting Levels
You drew support at $100 three months ago.
Price is now at $130.
Fix: Redraw your S/R levels regularly. Markets change. Levels change.
Mistake #4: Ignoring Higher Timeframes
You see support at $100 on the 5-minute chart.
But there's major resistance at $102 on the daily chart.
You buy at $100. Price hits $102 and drops.
Fix: Always check higher timeframes first.
Mistake #5: Not Waiting for Confirmation
Price approaches support at $100.
You buy at $101.
Price crashes through $100. You get stopped.
Fix: Wait for price to hit the level. Wait for rejection. Then enter.
The 2026 Support and Resistance Edge
Here's what most traders don't understand:
Support and resistance are not lines on a chart.
They're representations of human behavior.
At support:
- Buyers see value. They buy.
- Sellers take profits. They exit.
- Demand exceeds supply.
- Price bounces.
At resistance:
- Sellers see overvaluation. They sell.
- Buyers take profits. They exit.
- Supply exceeds demand.
- Price drops.
Every time.
This behavior has repeated for decades.
It will repeat for decades more.
Why?
Because human psychology doesn't change.
Fear and greed. Hope and regret.
These emotions create support and resistance.
And as long as humans trade, support and resistance will work.
Your Support and Resistance Action Plan
This Week:
- Identify 5 major support/resistance levels on your favorite stocks
- Mark them on your charts
- Watch how price reacts at these levels
- Don't trade. Just observe.
This Month:
- Practice drawing S/R levels correctly
- Trade the bounce strategy (with small size)
- Trade the breakout strategy (with small size)
- Track your results
This Quarter:
- Master 2-3 S/R strategies
- Track win rate and R:R for each strategy
- Focus on the strategy that works best for you
- Scale up gradually
Key Takeaways
- Support = floor, resistance = ceiling - price bounces at these levels
- 6 types of S/R - horizontal, trendlines, MAs, Fibonacci, psychological, volume profile
- Bounce trade - wait for rejection at S/R level, then enter
- Breakout trade - wait for break and retest, then enter
- Range trade - buy support, sell resistance in ranging markets
- Trendline bounce - buy pullbacks to trendline support in uptrends
- Confluence trade - trade where multiple S/R types align (highest probability)
- Use bodies, not wicks - draw S/R at candle bodies, not wick extremes
- Wait for confirmation - rejection candle before entering
- Check higher timeframes - always confirm S/R levels on daily or weekly chart
- Broken S/R flips - support becomes resistance, resistance becomes support
- More touches = stronger level - but beware of overtested levels
- Don't anticipate - wait for price to hit the level and show rejection
Support and resistance are simple. They're powerful. They work.
But they only work if you use them correctly.
Draw the levels correctly. Wait for confirmation. Respect higher timeframes. Trade confluence.
Do that. And you'll have an edge that will last your entire trading career.
ChartMini automatically identifies key support and resistance levels across multiple timeframes, detects confluence zones where multiple S/R types align, and alerts you when price approaches these high-probability reversal areas so you never miss a profitable setup.
Sources: