Support and resistance
A level has no power of its own. It works when enough people are watching it and acting there, which tells you exactly which levels are worth drawing: the obvious ones.
Why levels work at all
Price stops where orders are. Orders gather where traders have decided in advance to act, and those decisions cluster at prices everyone can see: previous highs and lows, round numbers, the open of a session.
This is why the levels that work are the obvious ones, not the clever ones. A level you found through careful analysis that nobody else is watching has no orders sitting at it and no reason to hold.
It also explains why levels break. When enough pressure arrives, the resting orders are consumed and price continues. Nothing was violated — the orders simply ran out.
Zones, not lines
Draw a level as a band, not a price. Reactions happen in a region because different participants place orders at slightly different prices around the same idea.
Treating a level as an exact number produces stops that are too tight and entries that miss by a few pips. Treating it as a zone of perhaps ten to twenty pips on a major pair reflects how price actually behaves.
A good test: if a two-pip difference changes whether your level held, it was never a level.
Which levels to keep
Ones price has touched and respected at least twice, preferably three times. A single touch is a coincidence.
Ones visible on a higher timeframe. A daily level carries far more weight than a five-minute one because far more participants can see it.
Ones where the reaction was decisive. A level price bounced off sharply matters more than one it drifted away from.
And keep the chart sparse. Twenty levels means every price is near one, which is the same as having none.
The flip
When support breaks it often becomes resistance, and vice versa. The reason is human: traders who bought at that support and watched it fail are now underwater, and many will exit at breakeven if price returns.
That creates real selling pressure at the old level, which is why the retest of a broken level is one of the more dependable setups available — and why it is worth marking a level as broken rather than deleting it.
Trading them without guessing
Two approaches, and they are opposites. Trade the bounce by entering at the zone with a stop beyond it, which gives a tight risk and is wrong when the level fails. Or trade the break by entering once price is clearly through, which is a worse price for better confirmation.
Choose one per setup in advance. Deciding at the level itself means deciding under pressure, which reliably produces the worst version of both.
Common questions
How do I find support and resistance?
Mark prices where the market has stopped and reversed at least twice, on higher timeframes first. Keep only the obvious ones.
Should levels be lines or zones?
Zones. Reactions occur in a region, so a band of ten to twenty pips on a major pair reflects reality better than an exact price.
Why did my level break?
The resting orders at it were consumed. Levels hold because of orders, not because of the price itself, and enough pressure exhausts them.
What is a support-turned-resistance flip?
When a broken support later caps price from above. Traders trapped on the wrong side exit at breakeven when price returns, creating real pressure at the old level.
How many touches make a level valid?
Two at minimum, three is better. One touch is a coincidence rather than a level.
Should I trade the bounce or the break?
Either, but decide before price arrives. The bounce offers a tighter stop; the break offers confirmation at a worse price.