Support and resistance are the foundation of technical analysis: the levels where price historically changes direction. Knowing how to draw them well is what separates noisy charts from a clear roadmap.
What a support and what a resistance is
A support is a level (or zone) below price where demand exceeds supply and price tends to bounce. A resistance is the opposite: above price, supply wins and the advance stalls. They are identified the same way: price touches the same zone several times and changes direction.
The more a level is tested and the older its history, the more relevance it gains. And when a support breaks, it often becomes a resistance, and vice versa.
How to identify them with pivots
The objective method for drawing levels is using pivots:
- A high pivot (local high): a candle whose high is not exceeded by the N candles before or after it.
- A low pivot (local low): the opposite.
- Nearby pivots are grouped into a single zone: several touches at the same level form a strong support or resistance.
The classic intraday pivot parameters are 3 to the left and 3 to the right (basic woPivot); for swing, 5·5 or more. The larger the window, the fewer and longer-term the levels.
Liquidity zones: EQH and EQL
Within level analysis there is an extra concept that explains why price returns to certain zones: liquidity. Equal highs (EQH) and equal lows (EQL) are highs or lows repeated at the same level, right where traders' orders accumulate. Price tends to "sweep" them in search of those stops, turning each repeated level into a magnet.
Breakout and retest: trading the levels
The two classic plays on a level are:
- Bounce: enter at the support/resistance with a rejection candle, with the stop beyond the zone.
- Breakout + retest: wait for the level to be broken, then enter on its retest once it has flipped (support→resistance or vice versa). It is the combination with the highest risk-to-reward ratio.
False breakouts are the biggest danger: price breaks the level, attracts entry orders and comes back. That's why trading the retest with confirmation (and not the live breakout) reduces that risk.
Automating them in TradingView
Drawing and monitoring levels by hand takes hours. In Pine Script it can be drawn automatically:
- Support and resistance via pivots with price labels, tolerance and a choice of line style.
- EQH/EQL liquidity zones extended, with configurable tolerance and lookback window.
- Breakout alerts for each level, firing only once per level.
The Todo lo posible indicator combines up to 20 pivot-based S/R levels, 12 EQH/EQL liquidity zones and support and resistance breakout alerts on a single chart.
Automatic support and resistance, liquidity, order blocks, divergences and 33 alerts in a single indicator. €10, one-time payment.
Frequently asked questions
What is a support and what is a resistance?
A support is a level where price tends to bounce upward; a resistance, where it tends to stall. They are identified when price touches the same zone several times and changes direction.
How are they detected automatically in TradingView?
With pivots: the indicator searches for local highs and lows and draws them with price labels, tolerance and breakout alerts.
What are EQH and EQL?
Equal highs and equal lows: highs or lows repeated at the same level where price often sweeps stops. They act as liquidity magnets.
Is a level breakout a buy or sell signal?
Not on its own. Wait for confirmation on the retest and let a breakout alert notify you instead of watching the chart by hand.