Horizontal line

Support and resistance

Support is a level where declines have stopped because buyers absorbed the selling; resistance is a level where advances have stopped because sellers supplied enough shares or contracts. They exist because market participants remember prices: buyers who missed the last low place orders there, sellers who bought the last high want to get out at breakeven.

How to draw it

1. Choose Lines → Horizontal line.
2. Click once at the level. With the magnet on, the line snaps to the open, high, low or close of the candle under the pointer, which is how you place a level exactly on a swing high or low.
3. The price is shown in a label on the right edge. Drag the line vertically to adjust it.

Good candidates are levels with several reactions, prior swing highs and lows of a higher timeframe, the previous day's high, low and close on intraday charts, and round numbers (100, 150, 1,000), where many orders are naturally placed.

Case study: resistance becomes support

When a resistance level finally breaks, the sellers who defended it are either filled or gone, and the buyers who missed the breakout wait for a pullback. The level often turns into support: this is called polarity or role reversal.

• Wait for a close above resistance: intraday pokes above a level that close back below it are failed breakouts.
• The retest gives a defined risk: a close back below the level invalidates the breakout.
• A breakout that never retests is common in strong markets; chasing it means accepting a wider stop.

Limits and common mistakes

• Too many levels. A chart with fifteen lines has a level everywhere and therefore none that matters. Keep the levels with the clearest reactions.
• Each test weakens a level. Every test absorbs part of the orders resting there; a level tested many times in a short period is more likely to break than to hold forever.
• Context. A support level in a strong downtrend is more likely to break than the same level in an uptrend.