What is support and resistance?

Raphx · August 21, 2006

I have absolutely no experience in the financial markets. I recently read an article from Stocks and Commodities about support and resistance. Can anyone explain to me what these two terms mean? Sorry if this is a newbie question. I would really like some help. Thanks in advance!

Jtrack · August 21, 2006

Support is basically a floor for price level. Resistance is the ceiling. If prices are falling, it will find support and when price is rallying it will find resistance. Once resistance is broken to the upside it will act as support. If support is broken, it will act as resistance.

Its important to understand where these levels are in trading. You can enter and exit at these levels.

Soultrader · August 21, 2006

I have absolutely no experience in the financial markets. I recently read an article from Stocks and Commodities about support and resistance. Can anyone explain to me what these two terms mean? Sorry if this is a newbie question. I would really like some help. Thanks in advance!

There are different ways to identify support and resistance levels. Common methods are using moving averages such as the 200MA on a 5 minute chart. Other methods involve fibonacci work. I particulary use market profile, pivot points, and fibs to define my support and resistance levels. Also look for high volume areas. These can act as strong S&R points as well. My advice is to read, read, read. Equip yourself with market knowledge.

Keys · August 21, 2006

What time frames do you trade on? And what time frame do you use for market analysis in identifying support and resistance points. Thanks!!

DbPhoenix · July 7, 2009

I stumbled across this thread while doing a search for threads on support and resistance (why I was doing this is not important). But since the OP is long gone and this particular thread is in the Beginner's Forum, I'm posting my results here in hopes that I may save somebody some time (the last is, of course, the best ).