Price action and chart patterns
Support level
A price area below the market where buying interest has stopped declines before, so price bounced at least twice.
Why it works
Traders remember prices. Buyers who missed the last bounce wait there, and sellers take profit there, so the level often holds again.
How to use it
Buy near support in an uptrend or a range, with the stop below the level (not exactly on it). The more clearly it held, the better.
The typical mistake
Placing the stop exactly at the support line, where everyone else’s stops are.
FAQ
What is Support in trading?
A price area below the market where buying interest has stopped declines before, so price bounced at least twice.
How do you trade Support?
Buy near support in an uptrend or a range, with the stop below the level (not exactly on it). The more clearly it held, the better.