Support & Resistance
Category
Klassische Technische Analyse
Sub-category
Support, Resistance & Trendlinien
Curated by
Last reviewed
Support and resistance are price zones where the market has repeatedly turned: support catches falling prices (buying interest), resistance caps rising ones (selling interest). They are zones of elevated reaction probability, not exact lines – and a broken level often switches roles (support becomes resistance and vice versa). They structure entries, stops and targets of almost all technical setups.
Context & Mechanics
Why levels form
Support and resistance are visible behaviour of market participants: at prior highs and lows sit memories (“I wanted to sell there”), open orders, stops and round numbers. Added to this is self-reinforcement: because many traders see the same levels, they act there – creating the reaction they expect. Relevant zones are recognised by multiple touches, high volume at the zone and the significance of the timeframe: weekly levels beat hourly levels.
Zones, not lines
The most common practical mistake is the line illusion: markets rarely turn at the exact tick but within an area – zones of a few tenths of a percent to several percent depending on timeframe and volatility. Consequence for trading: scale entries within the zone, place stops beyond the zone (plus an ATR buffer) instead of exactly at the level, where they get collected in the cluster with everyone else's stops.
Role switches and breaks
The most useful concept is the role switch (support-resistance flip): if price breaks sustainably below a support, it often becomes resistance on the pullback – and vice versa. The retest of a broken level is therefore one of the most traded setups (breakout retest). But: not every break holds – fakeouts that collect stops beyond the level and turn back are part of the game. Confirmation (closes beyond the zone, volume) separates viable breaks from noise.
Why it matters for traders
Support and resistance provide the map on which entries, stops and targets are planned – almost every technical setup is built around these zones. In the GlanWick chart, zones can be marked over historical data and evaluated by way of example – GlanWick is a training and simulation tool and not a prop firm itself.
Execution Example
A stock has bounced three times off the 74–75 zone (resistance) and turned three times at 68–69 (support). Now it breaks above 75 on high volume and runs to 77. A trader (1R = $300) waits for the retest.
- Role-switch thesis: the broken resistance zone 74–75 should act as support on the pullback – the retest is the planned entry area.
- Entry and stop: price returns to $74.60 and prints a bullish reaction candle → entry $74.90. Stop below the zone with a buffer: $73.60 → $1.30 risk per share, 300 ÷ 1.30 = 230 shares.
- Target: next significant resistance from the weekly chart at $79 → target distance $4.10 ≈ 3.2R – the setup clearly meets the 2R minimum requirement.
- Fakeout protection: had price closed back below $74 on a daily basis after the breakout, the breakout thesis would be invalid – no entry, however convincing the initial breakout looked.
Execution Risk & Errors
Treating levels as exact lines instead of zones and placing stops directly at the level
Overweighting zones from too-small timeframes while ignoring weekly and daily levels
Trading every touch blindly instead of waiting for reaction or confirmation signals
Missing the role switch after a break and clinging to the old scenario
Overloading the chart with dozens of lines until every price is some “level”
Frequently Asked
How do I identify relevant support and resistance?
Multiple touches with clear reactions, high volume at the zone, higher timeframes (weekly > daily > hourly) and confluence with other references such as prior highs, round numbers or widely watched moving averages.
Why don't prices turn exactly at the level?
Because orders are not bundled on one tick but distributed over an area – and because large players scale their execution. That is why professional traders work with zones and place stops with a buffer beyond them.
What is a support-resistance flip?
The role switch of a broken level: a sustainably broken support often acts as resistance on the pullback, a broken resistance as support. The retest of such levels is a classic entry setup.
How do I distinguish a real break from a fakeout?
Wait for confirmation: closes beyond the zone (on the relevant timeframe), elevated volume and ideally a successful retest. A wick through the level alone is frequently just stop fishing.