Section 3 · Chart Reading
Support & Resistance
The invisible floors and ceilings that shape every chart.
Support holds price up. Resistance pushes price down.
Price has memory — traders act at levels where price reversed before. The key insight: broken resistance becomes support. These levels are self-fulfilling because enough traders believe in them.
3 things to know
Support = a price level where buying interest is strong enough to halt a decline.
Resistance = a price level where selling pressure is strong enough to halt a rise.
Role reversal: once resistance is broken, it often becomes the new support.
Dive Deeper
The goal of a successful trader is to make the best trades. Money is secondary.
Alexander Elder — author of Trading for a Living
Key vocabulary — tap each card
Practice
Support & Resistance chart
Price bounces between support (green) and resistance (red).
Did you know?
The $50, $100, $200 round numbers on any stock are almost always significant support/resistance. Institutional algorithms automatically place limit orders at round numbers — making these levels self-fulfilling.