At What Point is Resistance(or Support) Broken?

Hi all,

Say if resistance for a currency pair is X.1000. At what point would you say that resistance is broken? Is it a percentage or an actual value or one or the other combined with a time frame, ie a couple of hours? How do you determine this value? If the pair traded up to X.1025 for an hour would you say that resistance is broken at that point? Thanks again.


Quite frankly, my observation has been that resistance can be somewhat arbitrary. Measure analyst supp./res. with your own retracement/trend formulae . . .and then conduct the best judgement… . and then. . . compare this evaluation with the “herd” … and then execute your trade … as far as supp/res. studies go.

Good question dave. If the price goes above X.1000 at candle close I consider that a break. There will be times when price will go up then down on S/R levels. The key to remember is – you must wait for the current candle to close to confirm the break.

[B]At what point would you say that resistance is broken? - [/B]It breaks when it breaks, whether 1 pip over or 50 it is considered a break of the Resistence or Trend Line etc.

[B]Is it a percentage or an actual value or one or the other combined with a time frame, ie a couple of hours? - [/B]When Resistence is broken, it is just that, it doesn’t quite mean that it has turned into Support yet.

When R is broken you normally have a few scenarios.

  1. The price rallies so strongly that it creates it’s first check-point or S way above the just broken R, so the initialy broken R isn’t even considered in this case, untill future revisits.

  2. The price breaks, pops it’s head up and out of the hole to see how things are looking above and if its clear of predators, it pops back down to test if R is willing to become S, if R holds you have your new S and this is probably the best way to solidify the break. It’s like the price sets a progress marker.

Imagine you were lost in the woods, you’d leave some sort of a marker every time you advanced wouldn’t you ? This way if you came back to the same point again you would know you’d been here before and turn away, you’d know exactly where you were and where you had to go next.

Can you imagine a price moving only upwards, or only downwards ? - well sure you can but it moves both up and down and when both sides moving the price start fighting off, it moves sideways because neither will let the other take control.

So when we break R, its like a rabbit coming out of its hole… it looks around if everythings good it goes back down and lets everyone else know its clear so they can all weeeeeeeee outside together and with greater confidence.

But imagine the rabbit saw a wolf… wud it not run like a mofo so fast back down the hole that it wud proly dig further down just to feel safer and slow its heart rate ? I wud lol

There is too much psycology in it to give a straight answer, you need to clear you mind and think logically.

What do you feel when you are trading and you’ve got a long and you break R… ?

You will probably be telling yourself:

A: "Man its probably not gonna hold R (now S), its probably gonna go back down, i should short now " outcome: you sell and help push the price down by about a microscopic fraction

B: “Yeah! We finaly broke R, this baby is comiiin up, yeeehaawww” outcome: you hold your position, in fact you’re so hyped and sure about your analysis that you even decide to add to your current long position and you help move the price up by a microscopic fraction

C: “You are calm and cool, you know this is a natural market movement and you are holding your position untill you break out of the current range caused by all this hype on both sides” outcome: you are neutral

Just like you, everyone else trading is a human too.

Now imagine all these emotions multiplied by billions upon billions to perfectly synthesize what we call the Forex

What would happen after a break then?

It is all just a fight between two different oppinions all you need to do is think human do your TA right and watch out for the news.

Think about it.

Also as Ram said, it is a very important indicator when a WHOLE candle, wicks and all closes above an important R (or below S if bearish) - you will notice in cases like these that a major fight goes on, bulls buy to help keep the candle over the R before it closes and bears sell to bring it down as much as they can and perhaps back below R before it closes. Either outcome here is a strong indicator for the respective side and many traders only enter their positions after they have a candle close over R or S.

E. Lang

Support and Resistance Levels Mislead Your Trading.

You will see times when Support or Resistance is broken, and prices immediately reverses after going up to 20 pips in the breakout way.

I suggest using the above smart tool “A whole candle to be fully formed opened and closed above or below S, R. and I use that with Fibonacci levels too”.

Another recommendation, try to rely on Daily S,R and higher. And try to draw your main S, R from daily charts while giving room for price to spike up and down the level.

Be careful of stop hunting around these areas, price will break then reverse. That happens. The best way is to develop your own system away from minor Support and Resistance levels or leave little job for them. Because measuring Support and Resistance is like a personal opinion… and everyone opinion is different.

Please take a look at the attached chart ddave

E. Lang

I am very much the same in that i wait for a close to consider the break worthy. In addition, i have also found that they are still susceptible to false breaks even after a close. A technique i have come to appreciate is waiting for the retracement. When i see that the original resistance is now convincing support, then and only then, would i consider it a true break worthy of trading.

Of course i run the chance of missing some moves but i find i also filter out a lot of false moves. In the end it is up to you to validate a break based on some tested criteria that you establish and then just go with it. No matter what decision you make there will always be some price to pay. No system or rule works all the time. Trade what tests true to you

Hi Pipbull,

can you please elaborate on this technique? after the price break R, do you wait for a possible retracement to continue? What criteria do you use to determine that R is now a convincing support?

Usually I determine the magnitude of importance of a S/R is by looking back at the previous price action and determine how many times the price has attempted to test the level. The more the price approach/reapproach that level, the more important and convincing the S or R level.

There are so many unknown in TA but the one thing I know 98% for sure is that price tends to follow its trend line. Not often though that you can have both TLB with S/R break for confirmation.

I am interested to find out more about your technique.