Hello fellow traders! Hope you're navigating the markets smoothly. As we go through the daily dance of price action, one thing becomes clear support and resistance are just moments, not walls. They're temporary. Momentum and trend strength? Now that’s where the real story lies.
This publication dives into how these so-called key levels break and more importantly, how to position yourself smartly when they do. Stay flexible, trade with confidence, and let the market lead. Let’s get into it.
Why Support and Resistance Levels Break
Support and resistance are some of the most talked-about tools in technical analysis. But here's the truth they’re not meant to last forever.
No matter how strong a level may appear on your chart, it eventually gets tested, challenged, and often broken. Why? Because the market is dynamic. The real edge for a trader lies not in hoping a level holds, but in reading when it’s about to fail and being ready for it.
No Resistance in a Bull, No Support in a Bear
Ever seen a strong bull market pause just because of a resistance line? It doesn’t. Price keeps pushing higher as buyers keep stepping in. Same goes for a strong bear market support levels collapse as fear takes over and selling snowballs.
Instead of clinging to lines on a chart, think bigger: Where is the momentum? What’s the trend saying? That’s where your trading decisions should come from.
Support and Resistance: Not Fixed, Always Shifting
Yes, these levels matter but only as zones, not exact prices. They’re areas where price has reacted in the past, where traders might expect something to happen again. But they’re not magic numbers.
When traders treat these levels as absolute, they fall into traps false confidence, poor entries, tighter than-needed stop losses. Always remember: market sentiment, liquidity, and institutional activity are constantly changing. So should your interpretation of the chart.
The Temporary Nature of These Levels
Markets move on supply and demand. A level that acted as resistance last week could easily become support next week. Or break completely.
Take the classic example support turning into resistance. When support breaks, former buyers might now be sellers, trying to get out on a bounce. That flip happens because behavior and sentiment have shifted. And as traders, that’s the real pattern we need to track not just price levels, but the psychology behind them.
“Strong” Support? It’s Mostly an Illusion
We all love the idea of a strong level something we can lean on. But large players? They don’t think like that.
Institutions don’t place massive orders at a single price point. They spread across a zone building positions slowly without moving the market too much. What looks like a strong level to us might just be an accumulation or distribution range for them. Always think beyond what’s visible on the surface.
How to Spot Breakouts Before They Hit
Here’s what separates seasoned traders from the rest the ability to spot potential breakouts before they explode.
🔹 Volume Confirmation: If a resistance level is tested repeatedly on rising volume, that’s a big clue buyers are serious.
🔹 Structure Shifts: Higher highs in an uptrend or lower lows in a downtrend signal that the old levels are being challenged.
🔹 Liquidity Traps: Watch out for fakeouts. These are designed to trap impatient traders just before the real move.
🔹 News & Events: Never ignore macro triggers. Earnings, economic data, or geopolitical surprises can fuel breakouts that crush technical levels.
🔹 Break & Retest: A solid strategy — wait for the level to break, then get in on the retest.
🔹 Momentum Tools: Indicators like RSI, MACD, or even EMAs can offer extra confidence that a move has legs.
3 Practical Trading Setups
1. Breakout Trading
Mark key levels on daily or weekly charts.
Watch for volume and momentum confirmation.
Enter after a clear breakout or retest.
Stop-loss: Just below resistance (for longs) or above support (for shorts).
2. Range Trading
If price is stuck between support and resistance, trade the range.
Look for price rejection (wicks, pin bars, etc.).
Use RSI or Stochastics to time entries.
3. Trend Following
Identify the dominant trend using moving averages or price structure.
Avoid going against the trend unless reversal signs are very clear.
Let profits run use trailing stops instead of fixed targets.
Mind Over Market: Psychology of S&R
One of the biggest traps in trading? Overtrusting support and resistance.
We get emotionally attached. We want the support to hold or the resistance to reject. And that bias clouds our judgment. How many times have you seen price break a level — and you freeze because it “wasn’t supposed to”?
To break free of that:
✅ Trade with a plan.
✅ Set your risk before the trade, not after.
✅ Don’t treat any level as sacred.
✅ Stay open to what the market is telling you not what you want it to say.
Final Thoughts
Support and resistance are great tools but they’re just one part of the puzzle. The real power lies in reading price action, watching volume, and understanding market sentiment. Don’t ask, “Will this level hold?” Ask instead, “What happens if it breaks?”
That shift in thinking? It can make all the difference.
Stay sharp, stay adaptive, and keep evolving with the market.
Wishing you green trades and growing accounts!
Best Regards- Amit Rajan.
This publication dives into how these so-called key levels break and more importantly, how to position yourself smartly when they do. Stay flexible, trade with confidence, and let the market lead. Let’s get into it.
Why Support and Resistance Levels Break
Support and resistance are some of the most talked-about tools in technical analysis. But here's the truth they’re not meant to last forever.
No matter how strong a level may appear on your chart, it eventually gets tested, challenged, and often broken. Why? Because the market is dynamic. The real edge for a trader lies not in hoping a level holds, but in reading when it’s about to fail and being ready for it.
No Resistance in a Bull, No Support in a Bear
Ever seen a strong bull market pause just because of a resistance line? It doesn’t. Price keeps pushing higher as buyers keep stepping in. Same goes for a strong bear market support levels collapse as fear takes over and selling snowballs.
Instead of clinging to lines on a chart, think bigger: Where is the momentum? What’s the trend saying? That’s where your trading decisions should come from.
Support and Resistance: Not Fixed, Always Shifting
Yes, these levels matter but only as zones, not exact prices. They’re areas where price has reacted in the past, where traders might expect something to happen again. But they’re not magic numbers.
When traders treat these levels as absolute, they fall into traps false confidence, poor entries, tighter than-needed stop losses. Always remember: market sentiment, liquidity, and institutional activity are constantly changing. So should your interpretation of the chart.
The Temporary Nature of These Levels
Markets move on supply and demand. A level that acted as resistance last week could easily become support next week. Or break completely.
Take the classic example support turning into resistance. When support breaks, former buyers might now be sellers, trying to get out on a bounce. That flip happens because behavior and sentiment have shifted. And as traders, that’s the real pattern we need to track not just price levels, but the psychology behind them.
“Strong” Support? It’s Mostly an Illusion
We all love the idea of a strong level something we can lean on. But large players? They don’t think like that.
Institutions don’t place massive orders at a single price point. They spread across a zone building positions slowly without moving the market too much. What looks like a strong level to us might just be an accumulation or distribution range for them. Always think beyond what’s visible on the surface.
How to Spot Breakouts Before They Hit
Here’s what separates seasoned traders from the rest the ability to spot potential breakouts before they explode.
🔹 Volume Confirmation: If a resistance level is tested repeatedly on rising volume, that’s a big clue buyers are serious.
🔹 Structure Shifts: Higher highs in an uptrend or lower lows in a downtrend signal that the old levels are being challenged.
🔹 Liquidity Traps: Watch out for fakeouts. These are designed to trap impatient traders just before the real move.
🔹 News & Events: Never ignore macro triggers. Earnings, economic data, or geopolitical surprises can fuel breakouts that crush technical levels.
🔹 Break & Retest: A solid strategy — wait for the level to break, then get in on the retest.
🔹 Momentum Tools: Indicators like RSI, MACD, or even EMAs can offer extra confidence that a move has legs.
3 Practical Trading Setups
1. Breakout Trading
Mark key levels on daily or weekly charts.
Watch for volume and momentum confirmation.
Enter after a clear breakout or retest.
Stop-loss: Just below resistance (for longs) or above support (for shorts).
2. Range Trading
If price is stuck between support and resistance, trade the range.
Look for price rejection (wicks, pin bars, etc.).
Use RSI or Stochastics to time entries.
3. Trend Following
Identify the dominant trend using moving averages or price structure.
Avoid going against the trend unless reversal signs are very clear.
Let profits run use trailing stops instead of fixed targets.
Mind Over Market: Psychology of S&R
One of the biggest traps in trading? Overtrusting support and resistance.
We get emotionally attached. We want the support to hold or the resistance to reject. And that bias clouds our judgment. How many times have you seen price break a level — and you freeze because it “wasn’t supposed to”?
To break free of that:
✅ Trade with a plan.
✅ Set your risk before the trade, not after.
✅ Don’t treat any level as sacred.
✅ Stay open to what the market is telling you not what you want it to say.
Final Thoughts
Support and resistance are great tools but they’re just one part of the puzzle. The real power lies in reading price action, watching volume, and understanding market sentiment. Don’t ask, “Will this level hold?” Ask instead, “What happens if it breaks?”
That shift in thinking? It can make all the difference.
Stay sharp, stay adaptive, and keep evolving with the market.
Wishing you green trades and growing accounts!
Best Regards- Amit Rajan.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.