Support and resistance

Why levels exist

Support is a price area where buyers stepped in before; resistance is where sellers did. They exist because traders remember prices: those who missed a move leave orders where it started, those caught on the wrong side wait to get out at breakeven, and stops cluster just beyond obvious highs and lows.

Which levels matter

• Clear swing highs and lows, especially on higher timeframes.
• Prior day / week highs and lows (PDH, PDL, PWH, PWL on the chart) — watched by everyone.
• Round numbers in big markets (BTC 100,000).
• Where a big move started (see supply and demand).

Draw zones, not razor lines: wicks overshoot. A zone from the wick extreme to the bodies of the candles that formed the level is a good default.

Role reversal and breaks

A resistance that breaks often becomes support on the retest — the sellers who defended it are now trapped, and buyers who missed the breakout wait for a pullback.

Each test also uses up the orders resting at a level. A level hit five times in a week is more likely to give way than to hold forever — the opposite of the common belief that "more touches = stronger".

How to use levels

• As locations: where to look for a setup, not a reason to enter on touch.
• As stop placement: just beyond the level, where the idea is wrong.
• As targets: the next opposing level is where profits are taken.