Price Action
Support
A price level where buyers have repeatedly stepped in and stopped the fall. Reversal candles mean far more when they form here.
In practice
EUR/USD has bounced off 1.0800 three times over two months, each time turning up with a long lower wick. That 1.0800 line is support — buyers have proven they will defend it. A hammer forming there carries real weight; the same hammer in the middle of a range means little.
Why it matters for traders
Support gives you a level to buy against with defined, tight risk, because if it breaks you know quickly that you are wrong. It is the foundation of risk-defined trading: a reversal signal in the middle of nowhere gives you no logical place for a stop, but a signal at support gives you a clear invalidation point just below the level.
Common pitfall
The mistake is buying at a support line with no confirming candle, then watching a slow bleed through the level. Support is a zone where buyers tend to appear, not a guarantee. Wait for a reversal candle or a hold-and-turn before committing, and place your stop below the level so a clean break invalidates the trade cheaply. Buying blindly at a line is hope, not a strategy, and exposes you to every false break.
Lessons that use this term
- Support and resistance
The levels the market remembers — how to find them and how to draw them properly.
- Moving averages (SMA and EMA)
The first indicator worth adding: trend direction, dynamic support and resistance, and how crossovers work.
Related terms
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