Technical analysis

Support and Resistance: How to Identify and Use Them

Astron Team · 09/24/2026 · 4 min read

If there's one concept every trader learns before any indicator, it's support and resistance. The idea is simple: at certain price levels, supply and demand tend to balance out more visibly, creating points where the price historically stops rising or stops falling. But correctly identifying these levels, and knowing what to do when the price gets close to them, takes more than just drawing a line on the chart.

In this article you'll see how to identify support and resistance, what determines the strength of a level, and how to use these zones for both bounce and breakout trades.

What support and resistance are

Support is a price zone where buying pressure historically exceeds selling pressure, slowing down declines. Resistance is the opposite: a zone where selling pressure tends to exceed buying pressure, slowing down rallies. These levels usually form at previous highs and lows — points where the price has reversed before, leaving a kind of "memory" on the chart.

It's also common to see support and resistance at round numbers, like R$ 50.00 or R$ 100.00, because many market participants place buy and sell orders right at these psychological values, even with no direct relation to a previous technical high or low.

What determines the strength of a level

Not every support or resistance has the same importance. A few factors increase a level's strength: how many times the price has already tested that region without breaking through, how long that level has existed, and whether it coincides with other references, such as a long-period moving average or a Fibonacci level.

A support tested three times over several months, always holding the price, tends to be more relevant than a support formed just a few days ago and tested only once. At the same time, each consecutive test also uses up some of the level's strength: after many touches, the chance of a breakout tends to increase, not decrease.

The role swap: from support to resistance

One of the most observed behaviors in the market is the swap of roles between support and resistance after a breakout. When the price breaks above a resistance and keeps rising, that same level tends to start working as support during an eventual correction. The reasoning behind this is that whoever was selling near that level, and saw the price break above it anyway, tends to buy back if the price returns to that region, reinforcing it as a new floor.

This behavior also holds in reverse: a support broken to the downside tends to turn into resistance during an eventual price recovery.

Trading bounces at support and resistance

A common way to trade these zones is to look for bounces: buying near a relevant support, with a stop slightly below it, or selling near a relevant resistance, with a stop slightly above it. Suppose an asset trading at R$ 24.50, with support identified at R$ 24.00. A buy in that region, with a stop at R$ 23.70 and a target at the next resistance, at R$ 25.50, would have a risk-reward ratio of roughly 1 to 3.

Trading support and resistance breakouts

The other approach is to trade the breakout itself: buying when the price closes clearly above a relevant resistance, or selling when it closes below a relevant support, betting on the move's continuation. This type of entry tends to benefit from above-average volume confirmation on the breakout candle, which reduces the chance of trading a false breakout.

Putting it into practice

On Astron, you can mark support and resistance directly on the chart and watch how the price reacts each time it approaches these levels, adjusting the strength assigned to each one based on the history of touches. Support and resistance aren't exact lines, but rather price zones, and treating them as zones, instead of single numbers, helps you better handle moves that test the level without respecting it with full precision. In either approach, setting the stop before entering is what protects your capital when the level doesn't hold as expected.

It's also worth watching the price's behavior as it approaches the level, not just the level itself. A slow approach, with small candles, tends to indicate indecision and a higher chance of a bounce; a fast approach with large candles tends to indicate more strength behind the move, increasing the chance of a breakout. Combining this behavioral read with the level's historical strength helps decide between looking for a bounce or waiting for breakout confirmation.