Table of Contents
- What Are Support and Resistance?
- Hard Barriers (Static Resistance & Support)
- Soft Barriers (Dynamic Resistance & Support)
- Psychological Barriers
Before we start, let me ask you a few simple questions.
Imagine gold price rises from $2,000 to $4,000.
What is the very first thought that comes to your mind?
- “Damn… I should’ve bought earlier.”
- “Missed it.”
- Regret. Frustration. What if…
Right?
Now, let’s say price drops back to $2,500.
What do you do?
- Buy.
- Buy more.
- Jump in immediately.
Exactly.
When enough buyers step in at $2,500, price starts moving up again.
That price zone is what we call support.
What Happens Next?
You bought at $2,500 and price climbs back to $4,000.
What do you do now?
- Sell.
- Take profit.
- Close everything.
Correct.
If selling pressure at $4,000 is strong enough to push price down, that level becomes resistance.
Now the Most Important Question
Let’s say you were one of the traders who bought at $4,000 (the top).
Price drops to $2,500, then later rallies back to $4,000 again.
Meanwhile, traders who bought at $2,500 start selling into your position.
Price fails to break higher and falls back again.
You’ve been holding a losing position for months.
Next time price returns to $4,000, what will you honestly do?
- Panic sell.
- Close fast.
- Get out as soon as possible.
Yes.
That’s exactly why $4,000 becomes resistance again.
This is how the market moves.
Markets Are Built on Repeated Human Behavior
Your psychology, my psychology, and the psychology of millions of traders worldwide are the same.
It doesn’t matter whether it’s:
- Forex
- Crypto
- Stocks
- Real Estate
Human behavior repeats → price behavior repeats → market structure is formed.
This is the foundation of support and resistance.
What Are Support and Resistance?
- Resistance is a price area where supply (selling pressure) is strong enough to stop further price increases.
- Support is a price area where demand (buying pressure) is strong enough to stop further price declines.
When price returns to the same support or resistance zone multiple times, it means the market is re-distributing buying and selling positions again and again.
This is not magic.
This is crowd psychology.
Stop Arguing About Right or Wrong
Go back and re-read the questions at the beginning.
That was market psychology analysis, not indicators.
If you keep arguing about who is right or wrong in trading, you’ll never truly understand the market.
The market doesn’t care about opinions.
It reacts to behavior.
Types of Support and Resistance (Barriers)
I group them under one simple word: BARRIERS
There are three main types:
1. Hard Barriers (Static Resistance & Support)
Hard barriers include:
- Horizontal price levels
- Trendlines
- Fibonacci retracement levels
These are fixed price zones drawn directly on the chart.
2. Soft Barriers (Dynamic Resistance & Support)
Soft barriers, also called dynamic barriers, include:
- Moving Averages (MA)
- Ichimoku
- Bollinger Bands
- Other dynamic indicators
These levels move with price over time.
3. Psychological Barriers
Psychological barriers include:
- Previous highs
- Previous lows
- Round numbers
Examples of round numbers:
- 10
- 20
- 50
- 100
- 1,500
- 2,000
- 4,000
Why Round Numbers Matter
Humans naturally:
- Take profit at round numbers
- Cut losses at round numbers
That’s why price often reacts strongly around them.
Whether price breaks through a barrier or gets rejected is always about probability, never certainty.
Final Thoughts
If you want to avoid fighting the crowd:
- Don’t sell exactly at round numbers.
- Sell slightly before them.
- Avoid standing in line with everyone else.
To judge whether a support or resistance level is strong or weak:
- Study past candles
- Observe how price reacted in previous supply and demand zones
One Last Reminder
Life is temporary. Death is permanent.
Make money, but know when enough is enough.
Greed is the root cause of most trading failures.
The market will always be here.
Your capital won’t — if you don’t respect it.