Support & Resistance & What it Looks Like on a Chart

As price moves it will hit a ceiling (resistance) or a floor (support) which takes time to penetrate. At these levels you will see on your charts turning points in the price. When the price penetrates these levels we have a breakout.

 

breakouts

When we have a breakout of the resistance level the price will initially accelerate away from it very quickly. It should then make a parabola type u-turn and retest the resistance level which now acts as support.

Whichever time frame you are viewing this breakout on, is the same time frame on which you will see the parabola. This is, if you are looking at the 15 minute time frame, you must look for the parabola on the same time frame, or higher. This formation is something that will take place over several candles.

 

resistanceturnssupport1

In a bull trend, resistance turns into support.

 

bullsrestosup

 

In a bear trend, support turns into resistance.

 

bearssuptores

 

If the price is rising then ask where is support and trade that level.
If price is falling then ask where is resistance and trade that level.

Define your risk, pull the trigger.