Support and resistance are the physical, visible representation of supply and demand on your chart. Support is where demand overwhelms supply — price bounces up. Resistance is where supply overwhelms demand — price bounces down. The golden rule: be a BUYER at support and a SELLER at resistance.
Support = price level where excess demand exists — buyers overwhelm sellers
S/R can be horizontal (price levels) or diagonal (trend lines)
Rule of Fives: each successive test weakens the level — 5th touch often leads to a break
Lesson
The S/R Flip — Your Best Friend
When resistance is broken decisively, it becomes support on the retest. When support breaks down, it becomes resistance on the retest. This 'S/R flip' is one of the most reliable and actionable patterns in all of technical analysis.
Breakout S/R Flip — resistance breaks → old resistance becomes new support → buy the retest
Breakdown S/R Flip — support breaks → old support becomes new resistance → sell the retest
The first retest of a flipped level is usually the cleanest entry
Valid trend lines require at least 3 touches along the line
Strength of S/R is determined by volume — more buyers/sellers at that level = stronger zone
More tests of a level = progressively weaker (Rule of Fives applies)
S/R flips are not guaranteed — always use the higher timeframe for confirmation
Check Yourself
Price was resisted at $100 three times, then broke out with a strong candle and closed at $107. It has now pulled back and is touching $100 again. What should you expect at this level?
● S/R Flip — old resistance is now support. Buy the retest.
● Trap — it will fall back through $100. Go short.
● Uncertain — the level has been retested too many times.
Answer it (with a live chart) in the interactive lesson.
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