Support
A potential buying zone
Support is an area where buying interest has previously been strong enough to slow or reverse a decline. Price may bounce from support, but it can also break below it.
SIKKA E SARKAR TRADING ACADEMY
Support, Resistance & Market Structure
Learn how traders interpret price levels, trends, breakouts and liquidity.
Why Do Price Levels Matter?
Financial markets move as buyers and sellers interact. Some price areas attract repeated attention because traders remember previous turning points, place orders near them or react to important news.
Support and resistance are usually better understood as zones rather than perfectly precise prices. Their significance depends on market conditions and trading activity.
Six Essential Chart Concepts
The charts below are simplified illustrations, not actual market prices or trading signals.
Resistance
A potential selling zone
Resistance is an area where selling interest has previously slowed or reversed a price advance. Repeated tests do not guarantee that the level will hold.
Breakout & Retest
When price moves beyond resistance
A breakout occurs when price moves beyond a watched level. Sometimes price returns to test the old resistance as possible new support. Not every breakout produces a successful retest.
False Breakout
A move that fails to hold
Price briefly crosses a level but then moves back inside the previous range. Traders sometimes call this a fakeout or bull trap when an upside breakout fails.
Market Structure
Higher highs and higher lows
An uptrend commonly forms successive higher swing highs and higher swing lows. A downtrend commonly forms lower highs and lower lows. Market structure helps describe a trend rather than predict it with certainty.
Liquidity Sweep
A brief move beyond a watched level
A liquidity sweep is a term traders use when price briefly moves beyond an obvious high or low and then reverses. The chart alone cannot prove who traded or why the move occurred.
Important Trading Terms
Higher High (HH): A swing high above the previous swing high.
Higher Low (HL): A swing low above the previous swing low.
Lower High (LH): A swing high below the previous swing high.
Lower Low (LL): A swing low below the previous swing low.
Break of Structure (BOS):A term used in some trading frameworks when price breaks a significant previous swing level.
Change of Character (CHoCH):A term for a potential shift in the previously observed market structure.
Liquidity: The ability to buy or sell an asset without causing a large price change. Traders also use the word informally when discussing clusters of orders near obvious price levels.
What Should Beginners Remember?
Support, resistance and market structure help describe price behavior. They do not reveal every hidden order or guarantee what price will do next.
Traders often combine these concepts with volume, candlestick patterns, news, volatility and risk management.