Support, resistance and where targets fail

Support is a price area where falling prices recently stopped and turned up. Resistance is where rising prices recently stopped and turned down. They matter because traders remember them and act there again: taking profit, entering against the move, or placing stops just beyond.

Finding them without guessing

Drawing levels by eye invites bias. The checker uses a simple rule instead. A swing high is a candle whose high is higher than the three candles either side of it. A swing low is the mirror image. These mark recent turning points objectively.

Why targets fail

If you buy at 4,462 with a target at 4,479, and there's a recent swing high at 4,475, price has to break through that resistance to reach your target. It might, but plenty of trades stall right there. That's why the checker flags a target that sits past a recent swing.

What you can do

• Bring your target in to just before the level. Your reward to risk falls, but your chance of filling may rise.
• Keep the target and accept the lower odds.
• Wait for the level to break first, then trade the move beyond it.

Key points

• Support and resistance are where other traders are likely to act.
• Swings mark them objectively.
• A target just past a level has to break it to fill.