What Is Support?
Think of support like the floor beneath the market. It’s a price level where the market has dropped before and then bounced back up. That means buyers step in and say, “Price is low enough, let’s buy!” So the price stops falling and starts rising again.
Example:
If EUR/USD keeps falling to 1.0800 and bounces up each time, 1.0800 is a support level.
What Is Resistance?
Now flip it, resistance is like the ceiling above the market. It’s a price level where the market has climbed before but failed to go higher. Sellers jump in and say, “Price is too high, let’s sell!” So the price stops rising and begins to drop. For example, if GBP/USD keeps going up to 1.3000 and falls down from there, 1.3000 is a resistance level.
How to Spot Support and Resistance in MetaTrader 5
1. Open your MetaTrader 5 app.
2. Go to Charts.
3. Change timeframe to H1 or H4 for better visibility.
4. Look for areas where price keeps bouncing up or down.
5. Use the "Draw Horizontal Line" tool from the chart menu. Mark the levels where price reversed multiple times
Now you've drawn your first support and resistance!
Why Support & Resistance Matter
Here’s why it’s super important:
1. It helps you buy low and sell high.
2. You can avoid buying too late or selling too early.
3. Many traders use these levels to set their Take Profit (TP) and Stop Loss (SL)
Bonus.
How Price Reacts to These Levels?
1. When price hits support, it may bounce up.
2. When price hits resistance, it may drop down.
3. If price breaks through support/resistance, it may keep going (this is called a breakout)
That’s how smart traders decide whether to buy, sell, or wait.
Quick real life example, let’s say you’re watching EUR/USD, and notice the price keeps bouncing at 1.0850, meaning support. It also keeps failing to pass 1.0950, meaning resistance. You could plan a buy near 1.0850 and sell near 1.0950 simple logic, powerful results.