Lesson 6 of 6 · Market Foundations
Your first chart read
Start at the right end of the chart.
Most beginners scan left to right. Instead, start at the most recent candle and work backward. Ask: is price making higher highs or lower lows? Where has it stalled? Recent structure tells you where the active levels are.
Find the levels before you find the trade.
Support is a price where buyers have stepped in repeatedly. Resistance is where sellers have repeatedly pushed price back. Mark these levels before looking for entries. Most good trades happen near them.
A level holds, then holds again.
RESISTANCE marks where sellers have repeatedly stopped the rally. SUPPORT marks where buyers have stepped in. The more times a level holds, the more traders are watching it, and the bigger the reaction when it finally breaks.
Price is pressing resistance. Which way does it go?
Reveal what happened
It went up. Price broke through the RESISTANCE level with heavy volume, confirming a BREAKOUT. This does not always work this cleanly: a break without volume or one that reverses quickly is a false break, and those happen often. Context, volume, and follow-through all matter.
Price has bounced from the same level four times. On the fifth test, what is the honest expectation?
Show the answer
B. It can bounce or break, so watch volume and the reaction. Repeated tests make a level widely watched, but they can also use up the buyers defending it. A fifth test can go either way. Volume and the reaction at the level tell you which.