Support and resistance: meaning in forex and gold trading
Support is a price zone where buying has tended to stop declines; resistance is a zone where selling has tended to cap rallies.
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Support and resistance: Support is a price zone where buying has tended to stop declines; resistance is a zone where selling has tended to cap rallies.
Finding levels
Support and resistance come from prior swing highs and lows, round numbers, previous day highs and lows, and areas where price has reacted several times. They are zones, not exact lines. Once broken, old resistance often acts as support and the reverse.
Using them
Levels help place entries, stops and targets. A common approach is to put the stop just beyond the level that would prove the idea wrong. Forexuro's free Telegram channel regularly shares levels being watched on gold and the majors.
Worked example
Gold fell to about 4,000 several times and bounced. That makes 4,000 a support zone. A close well below it would suggest the level has failed and the next area lower comes into view.
Common mistakes
- Drawing too many lines.
- Placing stops exactly at the level where everyone else has them.
If you follow trade signals, for example the gold signals or EUR/USD signals, understanding this term helps you size and manage each trade yourself. The free Forexuro Telegram channel shares daily market updates where these ideas are used in practice.
Related terms
Tools and guides
Many traders wait for a reaction at a level before acting, and read that reaction from the shape of the candlestick that forms there.
Frequently asked questions
Are round numbers support and resistance?
They often act that way because many orders cluster there.
How do I know a level has broken?
Many traders wait for a candle close beyond it rather than a brief spike.
Education only, not financial advice. Trading forex, gold and CFDs carries a high risk of losing money, and leverage magnifies both gains and losses. Past performance is not a reliable guide to future results. Read our risk disclosure.