If you stripped away every indicator from your chart—no RSI, no MACD, no Moving Averages—what is left?
Price.
And Price has memory.
Support and Resistance (S&R) is not just lines on a chart. It is the visual representation of human psychology (Fear and Greed) and institutional orders.
However, most traders draw them wrong. They draw random lines everywhere until their chart looks like a spiderweb.
In this masterclass, we will clean up your charts and teach you how to draw Key Levels that banks actually respect.
1. The Golden Rule: Zones, Not Lines
This is the #1 mistake. Price is rarely a perfect number like 1.05000.
It is an area.
Why? Because different brokers have slightly different prices, and bank orders are spread out.
If you draw a thin line, you will get "faked out" constantly.
How to fix it: Use the "Rectangle Tool" instead of the "Horizontal Line" tool. Draw a zone that covers the Wicks and the Bodies of the reversal candles.
2. How to Draw Levels Correctly
Do not zoom into the 5-minute chart to draw levels. You will get lost in the noise.
The Top-Down Approach:
- Monthly/Weekly Chart: Find the "Major Turning Points" (historical highs/lows). Make these zones THICK.
- Daily Chart: Find the "Swing Points" where price reversed recently. These are your main operating levels.
- H4/H1 Chart: Refine the zones for entry.
Rule: A level on the Weekly chart is 10x stronger than a level on the M15 chart. Always respect the big timeframe.
3. The "Flip" (Role Reversal)
This is the most powerful concept in Price Action.
"Resistance becomes Support."
The Psychology:
- Bears sold at Resistance. Price breaks up. Bears are trapped in loss.
- Bears wait for price to come back to "Breakeven" so they can exit.
- When price returns to the level, Bears buy to close their shorts.
- New Bulls also buy there.
- Result: Explosive Buying Pressure.
4. Psychological Levels (Round Numbers)
Humans love round numbers. We don't say "I'll sell at 1.05432". We say "I'll sell at 1.05500".
Key Levels to Watch:
- The "00" Levels: e.g., Gold at 2000.00, EURUSD at 1.1000. (Major Psychological Levels).
- The "50" Levels: e.g., Gold at 2050.00. (Mid-points).
Banks know this. They often place their large institutional orders at these round numbers.
5. Dynamic Support & Resistance
Horizontal levels are static. But trends move.
In a strong trend, price may never touch a horizontal level. It respects Dynamic Levels.
- Moving Averages: The 200 EMA and 50 EMA act as floating support.
- Trendlines: Diagonal support. (But be careful of the Trendline Trap).
6. Wick vs. Body: Where to Draw?
The eternal debate.
- The Wick (Tail): Represents the extreme price rejection.
- The Body (Close): Represents where the market accepted the price.
The Pro Solution: Draw your zone from the Body Close to the Wick High.
This creates a "Zone of Interest". Price can turn anywhere inside this zone.
Final Thoughts
Trading without Support and Resistance is like building a house without a foundation.
Keep your charts clean. Draw only the most obvious levels. If you have to squint to see it, it's not there.
Learn how to spot false breakouts at these levels: Breakout vs Fakeout Guide