A visual guide to support and resistance lines in trading:

Resistance Level: The price level where selling pressure encounters upward movement, making it difficult for the price to continue rising Support Level: The price level where buying interest appears during a decline, halting the fall and stabilizing the price

Four Main Formation Factors
1. Moving Average System
Uptrend: Moving averages (MA5, MA10, MA20) act as support
Downtrend: Moving averages exert resistance
Practical: When the price retraces to key moving averages, rebounds or resistance often occurs

2. Historical Highs and Lows
Previous highs: Dense trading zones, forming resistance levels
Previous lows: Key psychological levels, forming support levels
Multiple tests: Unbroken levels have stronger significance

3. Gaps
Upward gap: When the lowest price of the day is higher than the previous day's highest price
Downward gap: When the highest price of the day is lower than the previous day's lowest price
Function: Gaps create a price vacuum zone, providing resistance or support

4. Trend Channels
Upward channel: Upper boundary as resistance, lower boundary as support
Downward channel: Upper boundary as resistance, lower boundary as support
Application: Channel boundaries are suitable for high sell and low buy operations
Practical Trading Tips
Characteristics of Strong Support Levels
Multiple tests without breaking
Accompanied by large buy orders
Important moving averages or round number levels
Characteristics of Strong Resistance Levels
Multiple attempts without breakthrough
Accompanied by large sell orders
Previous significant highs

Conversion Principles
Key Rule: Resistance and support levels can switch roles
Support to Resistance: After breaking support, the former support level becomes resistance
Resistance to Support: After breaking resistance, the former resistance level becomes support

Confirmation Standards:
Effective breakouts require volume confirmation
Closing price must stay above/below the breakout level
Retests that do not break are confirmation signals
Practical Trading Strategies
Buying Strategies
Buy at support: Enter in batches when the price approaches key support levels
Breakout retest: Add positions after a breakout and retest confirms
Moving average support: Buy on retracements to moving averages during bullish alignment

Selling Strategies
Reduce positions at resistance: Exit in batches near key resistance levels
Stop-loss on breakdown: Exit promptly if support is broken
Moving average resistance: Sell on rebounds to moving averages during bearish alignment
Key Points
Judgment Techniques
Multiple confirmations: Use various methods simultaneously
Volume cooperation: Volume should support key levels
Timeframes: Longer cycles make support and resistance more significant

Risk Management
Strictly follow stop-loss rules
Avoid chasing highs at resistance levels
Exit immediately if support is lost
Manage position sizes reasonably
Notes
Dynamic adjustments: Support and resistance levels change with market conditions
Relative concepts: Different timeframes assign different importance
Psychological factors: Market sentiment influences level effectiveness
Comprehensive analysis: Use alongside other technical indicators
Practical Experience
Support and resistance are fundamental tools in technical analysis but are not foolproof. Success depends on:
Probability thinking: Develop strategies based on high-probability events
Capital management: Strictly control risk per trade
Patience: Wait for the best risk-reward opportunities
Continuous learning: Constantly improve your trading system

Remember: Technical analysis is an auxiliary tool; rational investing and risk control always come first. In practice, it’s better to miss an opportunity than to take unnecessary risks.