Support, resistance and trend lines (video lesson)

This is lesson 3 of the Safirion Course, the free video trading course from the Safirion broker. In this lesson, Mirielle shows how to draw support, resistance and trend lines on the chart, with a tip that makes marking highs and lows easier. The summary is below the video.

Using the zigzag to see highs and lows

Mirielle starts with a tip that makes drawing support and resistance easier. In the menu on the left, she goes to Indicators, uses the search tab and looks for zigzag.

According to Mirielle, this indicator draws a zigzag between the highs and lows of the chart, which helps you see where to place the lines. She recommends a setting of 5%, so the indicator stays close to the highs and lows, and then applying it.

With the zigzag on the chart, the next step is to follow both the last high and the last low formed by the indicator. That way you can mark support and resistance quickly and simply.

Drawing resistance and support with horizontal lines

After turning on the zigzag, Mirielle goes back to the menu on the left, opens Graphic tools and picks the horizontal line.

She places the first line on the visible high shown by the zigzag. That line becomes the resistance. Then she takes another horizontal line and places it on the visible low shown by the zigzag. That second line becomes the support.

What support and resistance are

Mirielle explains that support is the lower line and resistance is the upper line. Support works like the floor of the chart, an area where the price tends to have trouble going lower. Resistance works like the ceiling, an area where the price tends to have trouble going higher.

She stresses that these areas can be broken, and that this is part of the natural movement of the market. Even so, it is important to know where support and resistance are, to spot the nearest breakout.

As an example, Mirielle says that when she places a candle flow entry, she waits for the price to break above resistance when the chart is in an uptrend. In a downtrend, she waits for support to break.

An uptrend needs to break levels above. A downtrend needs to break levels below.

Moving support and resistance

When the chart moves on and breaks a resistance, Mirielle shows that you need to move the resistance line up. To do that, she hovers the mouse near the line until a small circle appears, then clicks, holds and drags the line to the new point.

She explains that support and resistance are chart levels that the market may need to break at certain moments. That is why these lines are not fixed forever: as new highs and lows appear, the trader moves support and resistance on the chart.

Getting the chart ready for the trend line

Next, Mirielle moves on to the trend line. She explains that for support and resistance the chart is zoomed in, to see the last high and the last low. To draw the trend it is the opposite: she zooms all the way out to see the movement as a whole.

The goal is to find the point where the chart last fell or rose and started a new move up or down. In the lesson example, she sees that the chart is rising, so she decides to draw an uptrend line.

She also mentions the downtrend line, but since the example chart is going up, the lesson continues with the uptrend line.

How to draw and adjust the uptrend line

To draw the line, Mirielle opens Graphic tools again and selects Trend line. The first click goes where the move starts to rise. She says to take the lowest point and pull the line up, always from the start of the move, never the other way around.

Once it is drawn, she adjusts the line to connect a few points on the chart. Mirielle points out that what matters is having at least two points touching or almost touching the line, besides the point used to start it.

Zoomed in again, she checks whether the lows are touching or almost touching the line. When that happens in at least two points, she considers the trend line well drawn.

When the chart breaks away from the trend

In the example, Mirielle notices that the chart broke away from the trend: it stopped staying above the trend line and started coming from below. She explains that at that moment there are two possibilities. The chart may break the trend, or it may go back up and resume the main trend.

That is why she advises against entering at that moment. The idea is to follow the chart to understand whether the price will return to the trend or confirm the breakout.

If the chart really breaks and starts to fall, Mirielle shows that you can draw a new trend line from a point where the move starts to fall. This line works as a helper line to see whether the chart starts following that path.

She concludes that, in that scenario, what was an uptrend may start forming a downtrend, also called a new low while it is still recent. When there is this trend divergence, the lesson says to wait and not trade at that moment.

Practice on the demo account

The fastest way to lock in what the lesson showed is to repeat it on the chart. On the Safirion demo account you practice with virtual balance and real prices, without risking money, and switch to the real account when you feel ready.

Risk warning: Trading leveraged products and options involves a significant risk of loss and may not be suitable for all investors. No lesson or strategy guarantees results. Trade only with capital you can afford to lose.