Support, Resistance & Trendlines

    By
    Ronin
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    Module 5 – Support, Resistance & Trendlines

    Every great entry, exit, and stop-loss comes down to one skill: knowing where price is likely to react. This module teaches you to map the battlefield — the levels where institutions stack orders, liquidity builds, and retail traders get trapped.

    What You’ll Learn

    • How to correctly draw and interpret support & resistance zones
    • The difference between strong and weak levels
    • How to use trendlines and channels to confirm structure and confluence
    • How to combine levels with candlestick confirmation for high-accuracy trades

    1. The Purpose of Levels

    Markets move from one value area to another. Between those areas, price pauses, reacts, or reverses. Support and resistance are simply footprints of past buying and selling aggression.

    • Support: A price area where buyers previously overpowered sellers
    • Resistance: A price area where sellers previously overpowered buyers

    Forget perfect lines — think in zones. Real price reacts within ranges, not razor-thin levels.

    2. How to Draw Support & Resistance Properly

    2.1 Step-by-Step

    1. Start on the Daily timeframe
    2. Mark major swing highs and lows where price clearly reversed
    3. Drop to 4H for refinement — adjust zones where multiple candles reacted
    4. Label each zone as major or minor

    2.2 Characteristics of Strong Levels

    • Tested multiple times with visible rejection (long wicks, strong reversals)
    • Coincides with structural points (HH, HL, LH, LL)
    • Aligned across multiple timeframes

    2.3 Weak Levels

    • Based on minor intraday reactions
    • No higher-timeframe confluence
    • Previously sliced through with little resistance

    Rule of thumb: The more times a level is tested, the weaker it becomes — until it finally breaks and flips polarity.

    3. The Flip Principle (Role Reversal)

    When support breaks, it often becomes resistance. When resistance breaks, it often becomes support. This flip is one of the most reliable continuation signals in trading.

    • Bullish breakout → old resistance becomes new support
    • Bearish breakout → old support becomes new resistance

    Combine the retest with a confirming candlestick (Engulfing, Pin Bar) for institutional-grade setups.

    4. Trendlines & Dynamic Support/Resistance

    Trendlines show directional strength — the slope of market emotion. They act as moving levels that evolve with structure.

    4.1 Drawing Clean Trendlines

    • Connect at least two significant swing lows (uptrend) or highs (downtrend)
    • Use wicks, not bodies, for precision
    • Keep it simple — clutter kills clarity

    4.2 Using Trendlines for Confluence

    • Trendline + horizontal level = high-value zone
    • Reversal candle at intersection = A-grade entry opportunity

    4.3 Channels

    Parallel trendlines form channels — the “railroad tracks” of a trend. Trade within them until a clear breakout and structure shift occurs.

    5. Liquidity Zones & Fakeouts

    Obvious levels attract stop-losses. Smart money uses those zones to hunt liquidity.

    • Liquidity Grab: Price pierces a level, sweeps stops, then reverses
    • True Breakout: Price breaks, retests, and continues

    Your job is patience. A wick rejection or engulfing candle on the retest exposes the fakeout.

    6. Combining Levels with Candlestick Confirmation

    The sniper framework:

    1. Identify key zone (support, resistance, or trendline)
    2. Wait for reaction (wick rejection, doji, engulfing)
    3. Confirm with structure (BOS or retest)
    4. Enter on confirmation close or 50% retrace
    5. Stop-loss: beyond the zone
    6. Target: next key level (minimum 1:3 R:R)

    7. Practice Drills

    Exercise 1 – Level Mapping

    On a Daily chart, mark 5 support and 5 resistance zones. Drop to 4H and refine each zone.

    Exercise 2 – The Flip Test

    Find examples where resistance flipped to support or vice versa. Mark the candlestick pattern that confirmed the flip.

    Exercise 3 – Trendline Confluence

    Draw trendlines on Daily and 4H charts. Observe candle behavior where trendlines intersect horizontal levels.

    8. Pro Insight

    Smart traders don’t predict — they prepare. Mapping levels is preparation.

    “Trading without levels is like boxing with your eyes closed — you might hit something, but it won’t be deliberate.”

    Master this skill and your entries, exits, and psychology will feel calmer, cleaner, and controlled.