Module 3 — Price behaviour
Support and resistance levels
6 minute read
In plain English
Levels are prices where buyers or sellers have previously acted in size — prior highs, prior lows, round numbers, the day's open.
Why it matters
They give you objective reference points, which is what turns a hunch into a plan with an invalidation point.
Example
If a stock has failed at $3.00 three times, that level matters to a lot of participants.
Try this
Mark three levels on a chart before the open and see whether price reacts at them.
Common mistake
Drawing levels after the move to justify a decision already made.
What this does not mean
A level is not a barrier. Price goes through levels all the time.
Educational content only. Not financial advice.