Support and Resistance: S/R

Support and Resistance (S/R) are important terms to understand when trading. This term refers to the horizontal values where price action often reacts for a given trading instrument.


An example on Facebook is offered below. Note how $120 is a horizontal level where price action often reacts. There are periods in time when this reaction is to be suppressed by the level and this is where price is acting as Resistance. There are other times when price action is buoyed by this level and this is referred to as Support. These types of key levels are always worth keeping in mind as they can often act like a magnet in any pullback.


I often refer to these key levels when discussing trading and I denote them in my writing as S/R; an abbreviation for Support and or Resistance.



FB chart showing $120 acting as Resistance and then Support:


Have a look for your own S/R levels next time you are assessing a chart!