3. Support & Resistance Mechanics: The Power of the S/R Flip
Part of Chapter 05: Technical Analysis Foundations & Candlestick Anatomy
- Why prior resistance turns into future support (Role Reversal)
- The psychology of trapped traders seeking breakeven exits
- Validating S/R flips with volume and retest candle closes
Support is a price level where buying interest is strong enough to overcome selling pressure. Resistance is a ceiling where selling interest overcomes buying pressure.
One of the most reliable phenomena in all of trading is the Support/Resistance Flip (S/R Flip). When price cleanly breaks above a major resistance level, that level flips to act as new support on subsequent pullbacks.
This occurs because traders who shorted at resistance are trapped underwater; when price pulls back to their entry, they rush to buy to cover at breakeven. Meanwhile, breakout traders who missed the initial move use the retest to enter, creating a powerful wall of buy orders.
Never buy the initial breakout green candle. The highest risk-to-reward entry is almost always the patient limit buy on the subsequent retest of the flipped resistance-turned-support.
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All Lessons in Chapter 05
Technical Analysis Foundations & Candlestick Anatomy (10 Lessons)