Demand for the asset improves as prices decline, which forms the apparent support line. On the flip side, resistance levels, or zones, can also arise due to overwhelming selling interest as a pushback to increasing prices.
Support zones are regions where a downtrend is anticipated to be at a standstill due to heightened demand.
Once a support or resistance level has been identified, it can serve as a potential entry or exit point. However, as the price action reaches a point of support or resistance, it will likely do one of two things:
1. bounce back away from the support or resistance level, or,
2. break through the price level and continue in its direction — until the price action meets its next hurdle in the form of another support or resistance level.
We also have customized indicators that will aid you if you wish to have it on your chart without drawing the zones.