Glossary · Markets · Beginner-friendly
Support and resistance
In plain English
Support is a price area where buyers often show up; resistance is where sellers often appear. Think of them as neighborhoods on a chart - useful hints, not magic walls.
Everyday analogy: A ball bouncing off the floor (support) or ceiling (resistance).
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Why it matters
Levels are crowd memory. They help frame risk - they are not magic walls.
A bit more detail (optional)
Zones, not razor lines
Treat levels as areas. Exact pennies rarely matter as much as the region where price repeatedly reacted.
False breaks
Price can spike through a level and reverse. Wait for follow-through before treating a break as decisive.
Simple examples
Prior high as resistance
A stock stalls at $100, falls, then returns to $98-$102. That zone is resistance until buyers push and hold above it.
Failed breakout
Price spikes through resistance on weak volume and closes back inside the range - a false break that traps chase buyers.
Easy mistakes to avoid
- Drawing so many lines the chart is noise
- Treating the first tick through a level as a guaranteed trend
- Ignoring fundamentals when a level breaks on real news
Remember: Levels are useful context until information breaks them.