Support and Resistance (S&R) are the foundation of technical analysis. No matter what indicators you use, understanding these key price levels is critical to spotting high-probability trades, setting smart entries and exits, and avoiding market traps.
In this guide, you’ll learn how to identify and draw support and resistance zones with precision — just like professional traders do.
What Are Support and Resistance?
- Support: A price level where demand tends to prevent the price from falling further.
- Resistance: A price level where selling pressure tends to prevent the price from rising further.
Think of support as a “floor” and resistance as a “ceiling” where price often bounces or stalls.
How to Identify Strong S&R Levels
1. Look for Multiple Touches
The more times price reacts to a level, the stronger that support or resistance becomes.
2. Focus on Swing Highs and Lows
Mark recent peaks and troughs — these often act as natural barriers for price movement.
3. Use Round Numbers (Psychological Levels)
Prices like 1.2000 in forex or $100 in stocks often act as invisible S&R due to trader psychology.
4. Check Higher Timeframes
Levels drawn on daily or weekly charts are more significant than those on lower timeframes.
Best Practices for Drawing S&R
- Use **zones**, not exact lines — price often respects areas, not precise points.
- Update levels regularly as new market structure forms.
- Combine S&R with indicators like RSI, MACD, or VWAP for confirmation.
Support Becomes Resistance (And Vice Versa)
When price breaks through support, that level often becomes new resistance — and the opposite is true. This is known as a role reversal.
Example: Trading with S&R
In this setup, price approaches a strong resistance zone while RSI shows overbought conditions — signaling a potential short trade.
How LogicINV AI Enhances S&R Trading
LogicINV AI automatically detects key support and resistance zones by analyzing:
- Historical price reactions
- Volume clusters
- Psychological price levels
It alerts you when price approaches these zones, combined with momentum and sentiment data to identify the highest-probability setups.
Summary
- Support and Resistance are critical reference points for every trade.
- Draw zones based on market structure, not arbitrary lines.
- Let AI help you track dynamic levels and avoid emotional decisions.
➡️ Next Up: Common S&R Mistakes That Lead to Bad Entries (Module 2.6E)
Trade with clarity. Use LogicINV AI to map key price levels and stay ahead of market moves. Start your free trial today!
