Summary Of Support and Resistance

Notes To Remember:

Support Level: The support level is the point where the price stops falling. The lowest price points lie on a horizontal zone that indicates the probable bottom level of the market.

Resistance Level: Resistance is the opposite of support, it's drawn where the price stops rising. The highest price points lie on a horizontal zone that indicates the probable top level of the market.
Breakout: The breakout happens when the price breaks the presumed support or resistance level and leaps over them.

Fakeout: The fakeout happens when the price breaks support or resistance level for a very short time and then immediately returns back to the previous area.
The Principle of Polarity: In the market when a breakout happens, resistance changes into support level or vice versa. This concept of replacing is called " the principle of polarity"

Depending on the direction of the market, two types of polarity may occur:

Resistance level turns into support (usually happens in up growing direction)
Support level turns into resistance (usually happens in down growing direction)

Frequently Asked Questions