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Lesson · Trading Academy · Beginner

Support and resistance

Levels the price has bounced from, role reversal and false breakouts.

Support is a zone where declines have repeatedly stopped because demand appeared there. Resistance is a zone where rallies stopped because of supply.

Levels are zones, not exact lines: the reaction prices differ a little each time.

After a breakout, resistance can become support and vice versa. A breakout after which the price quickly returns is called a false breakout.