What are Support and Resistance vibes?

“Support and resistance” are like the OGs of technical analysis.

These two are like the besties of price action and can totes help you find those clutch entry and exit points.

Funny thing is, everyone’s got their own wild take on how to measure support and resistance. 🤔

So, let’s hit the basics real quick.

Peep the diagram above. You see that zigzag journey heading up north, right? That’s some serious bull market vibes!

When the price zooms up and then chills for a sec, the highest point before it dialed back is now called resistance.

Resistance levels show where there’s a whole squad of sellers, bringing on killer selling pressure that puts the brakes on upward price moves.

When the price starts rising again, the lowest point it hit before the bounce back is your new support.

Support levels show where the buyer gang is hanging out, drumming up mad buying pressure to keep that price afloat.

Basically, resistance and support are like yo-yoing as prices do the upward-downward dance over time.

But when it’s a downtrend, it’s all backwards, fam.

Support: The Ride or Die Level

Support is the level where a downtrend might pause because peeps are ready to buy, like, "hold up!"

Picture it as a “floor” that refuses to let prices fall through the cracks.

When prices get close to this level, buyers swarm like "it’s payday," raising the demand and making the price do a U-turn.

This usually leads to those sassy price bumps off the support level, giving traders some lit buy signals.

Resistance: The Savvy Blocker

Resistance is basically support’s alt ego. It’s where an uptrend might take a breather cuz selling pressure’s on a roll.

Think of it as a “ceiling,” that says, “nah, not your day price.”

When a currency pair starts flirting with resistance, sellers flood in like it’s Black Friday, pushing the price down.

This situation throws traders a bone to sell or short the currency like a pro.

Trading Support and Resistance: A Beginner’s Guide

When in doubt, here’s a low-key breakdown on trading support and resistance:

Trade the “Bounce”

• Cop when the price heads to support.
• Exit when the price climbs to resistance.

Trade the “Break”

• Buy the breakout when price busts through resistance.
• Sell it when price crashes below support.

Bounce and break? Sounds kinda sus? Don’t trip, we’ll get into that hoopla soon.

Plotting Useless Support and Resistance Levels - Not Cap! 📉

Just remember, support and resistance aren’t, like, exact AF.

Sometimes, a level seems to be hashtag broken, only for the market to pull one of those “sike!” moments.

Candlestick charts usually rep these tests through eye-rolling candle shadows.

See how those candle shadow ninjas were testing the 1.4700 support level.

Back then, it seemed like the price was en route to break that support.

With hindsight, it was just trying that level out, like, for the mizillionth time.

How Can We Really Tell If These Levels Were Busted?

TBH, no definitive tea spilling here.

Some say “support/resistance line breaks when price def runs past it and closes below it, duh?”

But, like, *news flash* it isn’t always the narrative, y’all.

Our fav example—yep, back to that juicy narrative—let’s see if our trusty 1.4700 managed to break support.

Check this: price dipped below the 1.4700 support, but do you know what happened? It pulled right back like a Boss!

Believed it was the ultimate breakout and sold? I'd be definitely feeling some type of pain!

Peep that chart again: Naw fam, support was chillin', didn’t actually wave goodbye, and now it’s even buffed up in strength.

Support had a minor breach moment, but like, deffo bounce back! 🔄

When filtering out those wannabe breakouts, visualize support/res to be “zones”—like a mood—or summat, not super exact pl0x.

Plot using a line chart instead of janky candlestick charts could save you the wild chase, just mind the zone, not jitters fam.

Line Charts prioritize those closing prices.

Highs and lows are cop-out signals courtesy of meme-worthy market overreactions.

It’s kinda like the freakish stuff peeps do on social, and then say “yo, just a reflex!”

Plotting—ditch reflexes, sling those intentional vibes graphically, y’all.

When scrolling line charts, feel out support/resistance lines at those party time areas filled with epic peaks or valleys.

What Happens If Support or Resistance Gets Wrecked?

When prices bust through support/resistance screens, it screams major feels in the market crowd.

Here’s watcha typically gonna see:

• Breaking Support: Jigsaw puzzle gets real, precarious structure tumbles as buyers dip out...traders might jump the shady short boat.
• Breaking Resistance: Breaking barriers implies sprint—fans cheering, “Go bulls!”, market sentiment grabs bullhorns. Traders might go long (seriously).

The Support and Resistance Psychology Paradox

Support and resistance aren’t just emojis in a chart—they represent the ultimate market sentiment gather-round.

These levels compare to what’s haunting your newsfeed—and how wannabe traders behave.

At support, buyers rally coz the asset looks like it’s on clearance sale, amping up the demand.

At resistance, sellers vote nah on that asset, churning out more supply.

Insider Tea: Extra Facts on Support and Resistance:

• Price clips resistance? Might low-key turn into support.
• Bouncing off retests (specific resistance or support persistence), flips stronger like bootcamp hero snapshots.
• Break a support/resistance? Check traction, proceed if it ride/dies lit nation status without too much flappy awkwardness.

Once you’re comfy with the practice, spotting potential forex support/res areas will become second nature.

Next up, launching you into the hype of trading diagonal support and resistance lines, or as the pros dub it: trend lines. Buckle up, legends! 🚀