How to draw support and resistance.

A support or resistance line is only as good as the turns it is drawn from. Pick weak swing points and you end up with a chart full of lines that price ignores.

This lesson follows what support and resistance are. It shows how to choose the turns that count and which timeframe to start from.

What are swing highs and swing lows?

Look along a row of candles for one whose high pokes above its neighbours. If the two candles before it and the two after it all have lower highs, that candle marks a swing high.

A swing low is the mirror image: a candle whose low sits below the lows of the candles on both sides. Two candles on each side is a common setting. Some traders use three or more, which gives fewer and larger swings.

In the chart below, a 4-hour EUR/USD chart with illustrative prices, the swing high is at 1.0890 and the swing low is at 1.0850.

Resistance is drawn from swing highs and support from swing lows. The market structure lesson uses the same points to read trends.

Which swing points deserve a line?

A few months of chart hold dozens of swings, and most of them are small wiggles. These tests help you keep the ones worth drawing:

• Price turned near the same price more than once. Two turns suggest a level, and three or more make it clearer.
• The move away from the turn was large for that chart. A turn followed by 80 pips of movement tells you more than one followed by 10.
• Price reacted there recently. Older levels can still matter, but check that the market respected them on its last few visits.

Here is a cluster with illustrative numbers. A 4-hour EUR/USD chart shows three swing lows over two weeks: 1.0853, 1.0848 and 1.0851.

The highest is 1.0853 and the lowest is 1.0848. The gap is 0.0005, which is 5 pips. Three turns inside 5 pips is a tight cluster, so you would draw support at about 1.0850.

A single sharp swing with nothing near it is weaker evidence. Mark it lightly, if at all, and wait to see whether price turns there a second time.

How do you draw the line, step by step?

The same routine works on any pair:

1. Open a daily chart and zoom out until you can see roughly six months to a year of price.
2. Mark the obvious swing highs and lows, the turns you would notice without searching.
3. Look for two or more turns at about the same price. Those clusters are your candidates.
4. Draw a horizontal line through each cluster. Above the current price it is resistance, and below it is support.
5. Switch to a 4-hour chart and nudge each line to where the turns sit most tightly.

Each turn gives you two prices to choose from: the tip of the wick and the edge of the body. The candlestick lesson explains both parts.

Some traders draw through wicks, because that is how far price actually went. Others draw through bodies, because the open and close show where each period settled. Neither is a rule, so pick one method and use it every time.

Take three illustrative turns on a daily USD/JPY chart. The wicks reached 151.80, 151.95 and 151.70. The candle bodies topped out at 151.40, 151.55 and 151.35.

On yen pairs a pip is 0.01. The highest wick minus the lowest body top is 151.95 minus 151.35 = 0.60, which is 60 pips.

Sixty pips is too wide to call one price. That gap is the reason the next lesson treats every level as a zone with a top and a bottom.

Which timeframe should you draw levels on?

Start high and work down. A level on a weekly or daily chart took weeks or months of trading to form. A level on a 5-minute chart may have formed in under an hour.

Levels from higher timeframes tend to get more attention and break less easily. That is a rule of thumb with thin evidence behind it, so test it on your own charts.

These look-back windows are rough starting points, and traders vary them:

Here is how the layers fit, with illustrative EUR/USD prices. The daily chart gives support at 1.0850 and resistance at 1.0950, which is 0.0100 apart, or 100 pips. The 1-hour chart adds minor levels at 1.0880, 1.0905 and 1.0925.

Read the daily lines as the frame and the 1-hour lines as detail inside it. When the two disagree, give the daily level more weight.

How low you go depends on how long you hold trades. A swing trader may stop at the 4-hour chart, and a day trader may drop to the 1-hour or 15-minute. Top-down analysis walks through the whole process.

How many lines should your chart have?

If a line sits every 15 pips, price is always near one and the lines stop telling you anything. One or two levels above the current price and one or two below are usually enough.

Delete a line once price has crossed it several times without reacting. A level that price broke cleanly is different: it can switch roles, so old support may be tested later as resistance.

Redraw as the market moves. A level from six months ago can still be valid, but check each line against recent price before you rely on it.

Where drawn levels go wrong

Levels look convincing on old charts because you choose the turns after the fact. You notice the touches that held and skip the ones that failed, which makes every line look stronger than it was.

Two traders can look at the same chart and draw different lines, because a level is only a price where past turns happened to cluster.

The evidence that these levels hold more often than chance is limited and mixed. So treat a level as a place to watch, and decide in advance what you will do if price cuts straight through it.

That plan usually means a stop loss placed beyond the level, with room for the wicks you measured. Practising on a demo account first lets you check later which of your lines price respected.