GLOSSARY · MARKET STRUCTURE
What is support and resistance?
Support and resistance are price areas where a market has repeatedly stopped and reversed, marking levels where supply and demand previously changed the direction of price.
What it means
Support is an area below current price where buying has previously been sufficient to stop a decline; resistance is the same thing above, where selling has stopped an advance. They are areas rather than lines — treating them as exact prices produces stops that are hit by a single tick and entries that never fill.
Why it matters
The reason they persist is memory and positioning. Traders who bought at a level defend it, traders who missed it wait there, and resting orders accumulate around round numbers and previous extremes. The level is not magic; it is where the orders are.
What this changes in practice
A level that breaks frequently flips role, with old resistance acting as new support. On gold this behaviour is pronounced around whole-dollar and $10 increments because of how orders cluster, and several of our strategies key on the reclaim of a broken level rather than on the break itself — see liquidity sweep.
Related terms
- LiquidityLiquidity is the presence of resting orders available to be traded against, determining how easi…
- BreakoutA breakout is a move through an established support or resistance level, taken as evidence that …
- False breakoutA false breakout is a move through a level that immediately reverses back inside the prior range…
- Swing pointA swing point is a local high or low with a defined number of lower highs or higher lows on each…
Educational information only, not financial advice. Trading leveraged products carries substantial risk of loss. Last updated 2026-08-11.