What Support and Resistance Actually Are: The First Chart Concept Every Futures Trader Should Learn
Forget the fancy indicators. The oldest idea in charting is still the most useful one.
Let me ask you something. If I handed you a bare price chart — no indicators, no colors, no squiggly lines — could you tell me anything useful about it?
Most new traders would say no. They think the secret sauce lives in the indicators. The oscillators. The crossovers. The stuff with complicated names.
But in my opinion, here's the truth. . . after 36 years of staring at charts: the most useful thing on any chart is something you can see with your naked eye. It's the place where price stopped. Turned. Stalled. Bounced. We call those places support and resistance, and if you learn to see them, you'll understand more about a market than a screen full of indicators will ever tell you.
What Is Support? Think of a Floor
Support is a price area where a falling market has a habit of stopping.
Picture a ball bouncing on your kitchen floor. It drops, hits the floor and bounces. Drops again, hits the floor, bounces again. The floor is support. Price behaves the same way. A market falls to a certain area, buyers step in, and price bounces. It then falls back there again, and — what do you know — buyers show up again.
Why does that happen? Because markets have memory. Not the charts — the “people.” Somewhere out there are traders who bought at that level and did well. Traders who missed it the first time and promised themselves they'd buy the dip if it ever came back. Traders who sold it short and want to buy back their position where the selling dried up before. All of that human behavior piles up in the same neighborhood on the chart. That's all support is. It's a footprint left by people.
Notice I keep saying “area” and “neighborhood.” That's on purpose. Support is not a laser-thin line at one exact price. The markets are messy. A floor on a chart is more like a floor in an old farmhouse — a little uneven, a little creaky, but it'll still hold you up.
What Is Resistance? Now Flip It Over
Resistance is the same idea turned upside down. It's a ceiling instead of a floor.
A rising market climbs to a certain area and stalls. Sellers show up. Price backs off. It climbs up there again a few days or weeks (or even months) later, and the same thing happens. That area is resistance — a place where the market has a habit of running out of gas.
The people behind it? Traders who bought lower and want to ring the register. Traders who bought the top last time, suffered through the drop, and just want out even. Traders who like selling strength. Different reasons, same neighborhood. Another footprint.
Here's a simple way to keep it straight. Support is where buyers have shown up before. Resistance is where sellers have shown up before. The chart is just a record of where the crowd changed its mind.
Why Old Ceilings Become New Floors
Now here's where it gets interesting. When price finally pushes through a resistance area and keeps going, something curious tends to happen. That old ceiling often starts acting like a floor.
I may sound like magic, but it isn't. It's just people again. The traders who sold at that ceiling and watched the market run away from them? A lot of them would love a second chance to get on board — and they get it when price dips back to the old breakout area. The traders who bought the breakout want to defend it. So, the same neighborhood that once repelled prices now attracts buyers.
Chartists call this a role reversal. I just call it the market remembering. Either way, it's one of the most reliable ideas in all of charting, and it works the same in all markets (and timeframes) corn, crude oil, gold, or the S&P. Markets change. People don't.
What Support and Resistance Are NOT
Now, a word of caution, because this is where folks get themselves in trouble.
Support and resistance are tendencies, not guarantees. A floor can break. A ceiling can give way. In fact, some of the biggest moves in the futures markets start exactly when a well-watched level fails and everybody who was leaning on it must scramble. If you treat a support area like a promise — "price can't go below here" — the market will eventually teach you an expensive lesson.
They're also not a trading system by themselves. Seeing a support area on a chart tells you where something “might” happen. It doesn't tell you when to enter, where your stop belongs, how many contracts to trade, or when to take profits. That's the difference between knowing a concept and having a plan. In my own work, support and resistance are the starting point — my CTTP methodology builds a complete trading plan on top of them, with specific setups like my take on 1-2-3 top or bottom formations that I share with members. But the raw concept? That belongs to everybody. It's been working since traders were scratching prices on chalkboards.
And one more thing. Support and resistance show up on every timeframe — monthly, weekly, daily, right down to the one-minute chart. But here's my bias, and I’ve talked about it for years: the bigger the timeframe, the more the level matters. A floor that's held on a monthly chart for three years means a whole lot more than a bump on a five-minute chart during the lunch hour. That's one of the reasons I love analyzing daily charts and above. The big levels are where the big money pays attention.
How to Start Seeing Them Yourself
Want a homework assignment? It's free and it's simple.
Pull up a bare daily chart of any futures market. Strip off every indicator. Now just look. Where did price turn more than once? Where did the rally keep stalling? Where did the decline keep catching a bid (bouncing)? Use the horizontal line tool and mark those neighborhoods.
Do that on ten different markets and something will start to happen. The chart will stop looking like random noise and start looking like a map. You'll see where the crowd has been, and you'll start anticipating where it might show up again. Why does this matter? Because a trader with a map trades a plan. A trader without one will likely trade from the hip. And trading from the hip is how accounts get emptied.
Final Thoughts
Every fancy tool in trading is standing on the shoulders of this one simple idea: price remembers where people changed their minds. Floors and ceilings. Buyers and sellers. Footprints in the same neighborhoods, over and over.
You don't need to master anything exotic to start reading charts. You need to learn to see where the market has already told its story — and respect what it said.
The indicators will always be there. But learn the floors and ceilings first (and my Zone Trading approach that involves identifying support/resistance zones and levels).
Because price has a memory. And the traders who learn to read it are the ones the market keeps around.
Moving Ahead
If you are new to CommodityTrends, our memberships take these ideas a step further. We show you how we read the charts in real time, analyze the markets each day, and identify potential trading opportunities as they begin to develop.
To learn more about our memberships, visit: https://www.commoditytrends.com/register
— Jim Prince, CommodityTrends.com
Educational content only. Futures and options trading involves substantial risk of loss and is not suitable for every investor. Nothing here is a recommendation to buy or sell any contract. Past performance is not indicative of future results.
