What is a worked example of support resistance reversal?
Support resistance reversal is the idea that a previously identified support level can start behaving like resistance after it breaks, or a previously identified resistance level can start behaving like support after it breaks. A “worked example” explains the idea using a specific, hypothetical price path and makes every assumption explicit.
How does a worked example support resistance reversal work?
Mechanism and definition (what changes, and what must be observed)
In the simplest conceptual model:
- You mark a horizontal price level that has acted as a “floor” (support) or a “ceiling” (resistance) in the past.
- The price breaks through that level.
- The level is then “revisited” from the other side and price behavior around the level changes accordingly.
A key separation is between stable mechanics (the definition: “level switches role after a break and subsequent behavior”) and variable conditions (market volatility, trading costs, and execution quality). Because this article assumes no real-time data, the example uses invented prices to show the logic.
Worked numerical scenario (fully hypothetical)
Assume all values are in the same price units and represent one possible chart history.
Assumptions
- There is a single “support” level at 100.00.
- A “reversal” is defined here as: price breaks below 100.00, and later when price returns near 100.00 it behaves like resistance (price fails to stay above 100.00).
- Time spacing and exact candle construction are simplified; we only track key touches and closes.
- No live spread, funding, or slippage is modeled; we include a fixed “cost” just to highlight sensitivity.
Scenario steps
- Initial role (support): Price repeatedly bounces near 100.00.
- Break: Price moves to 99.20 and then closes below 100.00.
- Revisit: Later, price rises back to 100.10.
- Failure to reclaim: Price then moves down again and closes at 99.60 while trading remains near the 100 area.
Conclusion in this worked example
- Because the level was previously a “floor,” but after the break and revisit it begins to cap price near 100.00, the level can be described as having reversed from support to resistance.
Notice what is and is not claimed: the example explains a possible interpretation. It does not claim that every break leads to reversal.
A simple “checklist” that can be independently verified
If you were using this definition on a chart (without relying on this article’s hypothetical path), you would look for the same observable pattern:
- A clear prior level acting as support or resistance.
- A break through the level.
- A later approach to the same level from the other side.
- Changed behavior consistent with the level now acting as the opposite barrier.
Limitations and risks (where the idea can fail)
1) False breaks and whipsaws
A level may be broken briefly due to normal volatility and then price may quickly return, making the “reversal” interpretation ambiguous. In other words, a break alone is not the whole story; the revisit and behavior matter.
2) Level selection is variable
Support/resistance levels depend on how you choose the price area (exact line, averaging, or range). Small differences in level placement can change whether a revisit “fails” or “reclaims.”
3) Costs and execution are not optional in practice
Even in a purely conceptual example, costs can determine whether a hypothetical outcome is meaningful. If you add a fixed cost per round trip in a real setting, the net effect of any strategy-like use of the concept can change sharply. Since this article does not model live spreads or slippage, treat costs as a reminder of sensitivity rather than as a promised outcome.
4) Pattern relationships are not guaranteed to repeat
Historical level behavior does not establish future behavior. Markets can change regime, and the same numeric level can be treated differently as volatility, liquidity, and participant behavior evolve.
If you want to go deeper, the same limitations are discussed in: /forex-strategies/reversal-strategies/support-resistance-reversal/what-are-the-limitations-of-support-resistance-reversal/