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Forex Journal Team

June 8, 20261 min read

Support and Resistance: The Foundation of Price Action Trading

strategysupport-resistanceprice-actionbasicsstrategy

Support and Resistance

Support — a price level where buying pressure overcomes selling pressure Resistance — a price level where selling pressure overcomes buying pressure

How to Identify

  • Previous swing highs and lows
  • Round numbers (psychologically significant)
  • Moving averages (especially the 200 EMA)
  • Trendlines connecting multiple touches

How to Trade Them

  • Bounce strategy — buy at support, sell at resistance
  • Breakout strategy — buy when resistance breaks, sell when support breaks
  • Role reversal — broken resistance becomes support (and vice versa)

The more times a level is tested, the stronger it becomes.

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