If patterns are sentences, support and resistance are the letters. A double top is two failures at resistance. A rectangle is support and resistance running flat. A triangle is one of them sloping. Learn to see the two levels and the named patterns mostly take care of themselves.
They are zones, not lines
The single most common beginner mistake is treating support as a price. It is not — it is a region where buying has repeatedly shown up. Price will overshoot it, wick through it, and come back. A stop placed exactly at "the line" is a stop that gets hit by noise.
Think of the level as the middle of a band. How wide the band is depends on volatility: on a quiet day it might be a few pips, during a news print it might be twenty times that.
Levels flip roles
When resistance breaks and holds, it tends to become support on the way back down. When support breaks, it tends to become resistance on the way back up. This is called role reversal, and it is one of the few genuinely useful ideas in technical analysis — because it gives you a specific place to put a stop and a specific place to look for a re-entry.
It is not guaranteed. It is just common enough to be worth planning around.
How strong is a level?
Three things tend to make a level matter more:
- How many times it has been tested. Three touches beats two. But note: a level tested five or six times is also a level that a lot of people have stops just beyond, which makes the eventual break sharper.
- How much volume traded there. On CFD charts you usually do not get real volume, so use time spent at the level as a rough proxy — long consolidation means more orders accumulated.
- How far price travelled after the last touch. A level that produced a big move is one people remember.
How to check this yourself
Take a chart, draw two horizontal lines where price visibly turned at least twice each, then scroll forward bar by bar without redrawing anything. Count how many times price reacts within a small distance of your lines. If it is fewer than half the touches, your lines are in the wrong place — most beginners draw them too tight, through the wick extremes rather than through the closes.