Support, Resistance and Pivot Points: Finding Key Levels
Key levels are price areas where buying or selling pressure has shown up before. They help you judge where a move might pause, reverse or accelerate.
Support and resistance
Support is an area below the current price where demand has previously been strong enough to stop a decline. Resistance is an area above where supply has capped rallies. When a level breaks, it often switches role: old resistance can become new support.
Where to look for levels
- Prior swing highs and lows on daily and weekly charts.
- The previous day's, week's and month's high and low.
- Round numbers such as $2,000 gold or $100 oil, which attract orders.
- Gaps and areas where price moved quickly with little trading.
Think of levels as zones rather than exact lines. Markets often overshoot a level slightly before reacting.
Classic pivot points
Pivot points are a simple formula many traders use for daily reference levels, based on the previous period's high (H), low (L) and close (C):
- Pivot (P) = (H + L + C) / 3
- R1 = 2P − L, S1 = 2P − H
- R2 = P + (H − L), S2 = P − (H − L)
- R3 = H + 2(P − L), S3 = L − 2(H − P)
Price trading above the pivot is often read as a positive bias for the session, below as negative. On our charts you can add pivot points from the Indicators menu (search for 'Pivot Points Standard').
Using levels sensibly
Levels are not guarantees. Combine them with the trend, candle behaviour around the level and the economic calendar, since major data releases can push price straight through any level.
Educational content only, not financial advice. See our disclaimer.
Next guide: Technical Indicators Explained: Moving Averages, RSI and MACD