Direct answer: what support and resistance are
Support and resistance in forex are price areas (not exact single numbers) where price has historically shown hesitation or reversal. A support zone is where downward movement has often slowed or stopped; a resistance zone is where upward movement has often slowed or capped.
In the dynamic view, these zones can shift in strength and location as new bars arrive and the market structure evolves. That means you identify levels, then continuously reassess whether price action still reacts to those areas.
Explanation: how to find them step by step
1) Use prior swing highs and swing lows
Look for clear turning points in the chart—places where price formed a swing high (a local peak) or swing low (a local trough). Mark the area around those turns.
Then add the rule of thumb: if later price revisits the same region and reacts again (for example, by forming another nearby low/high or by reducing the break distance), that zone becomes stronger.
2) Add “reaction history” using chart density
Zoom in and examine where price spent more time. You can approximate this by looking for periods where many candles cluster around similar prices. A dense area often reflects more agreement about value.
Treat the most traded price region as a zone and mark its boundaries loosely, because wick extremes can differ from where the market actually accepted price.
3) Include prior breakout and retest areas
When price breaks above an old range (or below it), the old boundary often becomes a new resistance (or support) during a later retest.
To apply this without assuming outcomes, you check only what happened on the chart: does price return toward the previous boundary and then hesitate or reverse within that region?
Example checks: how to verify a level is “working”
A level estimate improves when several independent checks point to the same zone:
- Multiple touches: price has approached the zone more than once and shown noticeable hesitation.
- Respect of the zone: price reacts near the boundary rather than far away.
- Structure alignment: the zone sits near a relevant swing high/low or range edge.
If price repeatedly moves through the area and starts to accept beyond it (for example, by establishing a new swing structure away from the old zone), treat the original level as weakened or invalidated.
Limitations and what to assume
Support and resistance are behavioral estimates, not guarantees. Market conditions can change, so a level that worked in one segment can fail later.
Because this approach uses historical chart features, you cannot infer future results from past reactions alone. Also, different chart timeframes can produce different zones, so reassess levels as new price action reshapes structure.
For dynamic support resistance, the key limitation is continuous uncertainty: levels require ongoing checking rather than a one-time marking.