Support & Resistance Cheat Sheet

What it is: Whole and half-figure prices (e.g. 1.1000, 1.1050, 150.00) that cluster resting orders

Why it works: Retail stops, take-profits, and institutional orders bunch around round figures, so price often stalls or reverses nearby

Reliability: ⭐⭐⭐⭐ (High as confluence, weaker alone)

Key: Round numbers are strongest when they line up with an existing supply/demand zone or trendline

Uptrend: A series of higher highs and higher lows, with each pullback finding support above the last

Downtrend: A series of lower highs and lower lows, with each rally capped below the last

Why it matters: Support/resistance levels only carry weight in the context of the trend they sit in

Key: Trade support in uptrends and resistance in downtrends first — counter-trend levels need stronger confluence

Polarity flip: Once a support level breaks decisively, it frequently flips and acts as resistance on the retest

Why it works: Trapped buyers look to exit at breakeven, and new sellers defend the level

Reliability: ⭐⭐⭐⭐ (High on clean breaks with follow-through)

Key: The same logic applies in reverse — broken resistance often becomes support

What it is: Price rarely respects a single price point — it reacts across a band formed by the wicks and bodies of prior turning candles

Why it matters: Drawing a single hairline invites false breaks; a zone accounts for the natural noise around a level

Practical tip: Mark the zone from the furthest wick to the body close of the reversal candle(s)

Key: Tighter zones on higher timeframes tend to be more reliable than wide zones on lower timeframes

Formation: A candle with a range well above average, closing strongly in the direction of the level break or bounce

Why it works: Large range signals aggressive, committed order flow rather than indecisive drift

Entry: On the break of the large range candle's high (bullish) or low (bearish), with stop beyond its opposite extreme

Key: Most powerful when the large range candle forms directly at a support/resistance zone, not mid-range

Formation: Price breaks a level with conviction, then pulls back to retest it before continuing

Why it works: Confirms the level has genuinely flipped polarity rather than producing a false break

Entry: On rejection at the retest, with stop just beyond the broken level

Key: A shallow, fast retest with a rejection wick is a stronger signal than a slow grind back to the level

What it is: Stacking two or more independent factors — round number, trend, fresh zone, prior structure — at the same price

Why it works: Each factor draws in a different pool of orders; overlap concentrates reaction into one small area

Entry: Treat single-factor levels as watch zones and reserve full position size for stacked confluence

Key: Three weak signals stacked together beat one strong signal alone

The myth: A level that has bounced price three or four times is treated as "battle-tested" and therefore safer to trade

The reality: Every touch fills and absorbs some of the resting orders defending that level, so each retest leaves fewer orders behind

What actually matters: A fresh, untested zone that price has never returned to holds far more unfilled orders than a level tested repeatedly

Key: Treat repeated touches as a level being weakened, not confirmed — the odds of a break increase with each visit

The myth: Price must reverse every time it approaches a whole or half figure

The reality: Round numbers add probability as confluence, but on their own they are frequently sliced straight through, especially in strong trends

What actually matters: Look for a genuine reaction — a rejection wick or large range candle — at the round number, not just proximity to it

Key: Use round numbers to anticipate a reaction, not to assume one

The myth: A resistance level "must" cap price even inside a strong, established uptrend

The reality: Counter-trend levels get overrun far more often, since the dominant order flow is already pushing the other way

What actually matters: Weight levels by trend context — with-trend support/resistance is higher probability than counter-trend

Key: Reserve counter-trend level trades for strong confluence and smaller size, or skip them entirely