SesTrading · Answers

Support and resistance: levels, ranges and the breakout-retest

By Saad El Soussi, UAE-authorized finfluencer · Updated 2026-11-08

Support is a price level where the market has stopped falling at least twice, because buying overcame selling there; resistance is a level where it has stopped rising at least twice. Between the two the price forms a trading range; a close beyond either side is a breakout that can start a new trend, and the lesson's entry is not the breakout candle but the retest: the price comes back to the broken level, treats old resistance as new support (or old support as new resistance) and leaves again. On gold's 4-hour chart from August to November 2026, 21 swing levels were broken by a close; 17 of them were retested within five trading days, but only 6 of the 17 retests were clean (no close back through the level within two days), and 11 of the 21 breaks closed back through the level at least once. So the retest usually comes, it is usually messy, and the stop belongs some way beyond the level, not on it.

What support and resistance are

The lesson's definition is strict on one point: a level counts only if the market has rejected it, or found support at it, at least twice. One turn is a swing; two turns at the same price is a level. It also says a level is considered stronger the more times the price has tapped into it. The mechanism is simple supply and demand:

	Support	Resistance
Where	Below the current price	Above the current price
What happened there before	A decline stopped, at least twice	A rise stopped, at least twice
Why	Buying power was strong enough to overcome the selling pressure	Selling pressure overcame the buying power
What it may do next	Stop a decline and reverse it upward	Stop a rise and reverse it downward
After it breaks	Often becomes resistance	Often becomes support

Levels are zones, not lines. On a 4-hour gold chart two rejections rarely happen at exactly the same dollar; a band of $5 to $10 around the turning points is what you draw, and the wicks matter as much as the closes because that is where the orders were. Draw them on the daily or 4-hour chart first, then look for entries on the 1-hour or 15-minute chart inside the zone: trading timeframes explains the pairing.

The range between the levels

When the price moves between a support and a resistance level, it forms a trading range. The lesson's chart shows exactly that: resistance tapped three times, support tapped twice, the market consolidating between them. Traders keep an eye on the area because, in the lesson's words, "it is just a matter of time before either breaking above the resistance or the support", and a breakout above resistance or below support can signal the start of a new trend, bullish or bearish.

Two ways to trade a range, and the lesson chooses the second. The first is to buy support and sell resistance while the box holds; it works until the one time it does not, and that one time is the breakout. The second is to wait for the breakout and trade the continuation, which is what the next section describes. Either way the Asian session is the smallest daily example of a range, and the sessions lesson describes how London usually resolves it.

Breakout, retest, go

The lesson's example: the price breaks up through the resistance level, makes a small retracement "just to retest this level", and the level that used to be resistance is now seen as support; then the price breaks out again and the trend continues. That sequence, break, retest, continuation, is the setup. Three reasons it is better than buying the breakout candle:

The stop is closer. At the retest the level is right under the entry; on the breakout candle it can be $30 to $50 away on gold.
The false breaks sort themselves out. A break that fails usually fails fast, and you were not in it; a break that holds comes back to the level and gives you the entry.
You are trading the second decision of the market, not the first. The breakout is the first vote; the retest that holds is the market confirming the vote. The measurements below show how often that confirmation comes and how clean it is.

Where to enter inside the retest is a candlestick question: a rejection wick at the level on the 1-hour chart, or a small higher low there, is the usual trigger. Where to place the stop is answered by the numbers below.

Trend lines: sloped support and resistance

The lesson's second chart is a bearish market where the levels are not horizontal: the price taps a falling resistance trend line, falls to a falling support trend line, back to resistance, back to support. As long as neither line breaks the trend is intact; the lesson is careful to say "we did not break out either upside or downwards, so we are still in a bearish trend". The same break-and-retest logic applies: if the market broke above the resistance trend line and retested it as support, the lesson expects the market to move up. A trend line needs two touches to draw and a third to trust, like a horizontal level; and it is only a drawing until the price respects it, which is why the horizontal levels at swing highs and lows come first in market structure.

What we measured: how broken levels behaved on gold

Data: hourly COMEX gold futures (GC=F, via Yahoo Finance) from 3 August to 2 November 2026, built into 401 four-hour candles; swing highs and lows marked with six candles on each side, the same method as on the market structure page. One quarter of one market in a falling period; the proportions will differ in other periods, so read them as a reality check on the lesson, not as odds.

We took every swing high and swing low as a level (36 levels: 19 highs, 17 lows), looked for the first 4-hour close beyond it within the next 15 trading days (the break), and then followed what happened:

Step	Count	Share	Meaning
Levels broken by a 4-hour close within 15 trading days	21 of 36	58%	15 of the 17 lows broke, only 6 of the 19 highs: a falling market
Breaks that closed back through the level within 2 trading days (12 candles)	11 of 21	52%	Half the breakouts failed at least once before anything else happened
Breaks that were retested within 5 trading days (price came back to the level)	17 of 21	81%	The retest usually comes
Retests that were clean (close on the right side, no close back through the level in the next 12 candles)	6 of 17	35%	The textbook picture is the minority
Retests after which the price went beyond the post-break extreme within 5 trading days	14 of 17	82%	The direction of the break mostly continued, clean retest or not
Median favourable move within 2 days after a clean retest	$116		Against a median 4-hour candle range of $30

Three things follow. First, the lesson's advice to wait for the retest rather than buy the breakout is supported: four breaks in five came back to the level within a week, so patience cost little. Second, the retest is rarely tidy: in 11 of 17 cases the price closed back through the level at least once before continuing. A stop placed right on the level, or a few dollars beyond it, was taken in most of the trades that later worked. Put the stop beyond the level by at least one typical candle (the median 4-hour range in the sample was $30; the median 1-hour range $15), and size the position from that distance with the lot size calculator. Third, the asymmetry between lows and highs (15 of 17 lows broke, 6 of 19 highs) is the daily structure speaking: in a falling market, support breaks and resistance holds. Read the structure on the daily chart before deciding which side of the range you want to trade.

What we did not test: whether levels with three or more touches held better than levels with two, which the lesson implies. Ten of the 21 broken levels had been touched again (within $5) before the break, so a second touch did not prevent the break; a proper test needs a longer sample and is on the list for the monthly refresh.

A worked example

Gold has traded between $3,940 (support, touched twice) and $4,010 (resistance, touched three times) for two weeks on the 4-hour chart; the daily structure is bullish. A 4-hour candle closes at $4,022. You do nothing. Two days later the price dips to $4,008, an hourly candle leaves a wick below the level and closes back above it, and the next hourly candle makes a higher low. Entry $4,012. Stop $3,994, $18 below the entry: under the level with room for the messy retest, roughly half a typical 4-hour candle beyond it. Target $4,080: the height of the range ($70) added to the breakout level, a common first target. That is $68 of reward for $18 of risk, 3.8R.

Account $5,000, risk 1% = $50: 50 ÷ (18 × 100) = 0.0278, rounded down to 0.02 lots. Loss at the stop 0.02 × 100 × 18 = $36; gain at the target 0.02 × 100 × 68 = $136. If a 4-hour candle closes below $3,994 the break has failed, which happened in about half of our sample's breaks; you take the $36 and wait for the next level. Check variations in the profit calculator.

Key points from the lesson

Support and resistance are levels the market has rejected or held at least twice; the more taps, the stronger the level is considered.
Support: buying power overcomes selling pressure and a decline can reverse upward. Resistance: selling overcomes buying and a rise can reverse downward.
Between the two levels the price forms a trading range; a breakout above resistance or below support can signal a new trend.
After the break, expect a small retracement that retests the level; old resistance is now treated as support (and the reverse).
Trend lines are sloped support and resistance; the trend is intact until one of them breaks, and a break retested as support is the bullish picture.
Our numbers: 17 of 21 broken levels were retested within five days, 6 of 17 retests were clean, 14 of 17 continued. Wait for the retest, give the stop room.

Previous summary in the module: candlestick patterns (the entry trigger at a level). Next: Fibonacci retracement, the tool the course uses to place the retracement inside a trend. Related: chart patterns (double tops, double bottoms and triangles are built from these levels), market structure and the gold trading strategy, whose Asian-range setup is this lesson applied to a single day.

Want to see levels drawn on live gold charts?

The Telegram bot answers in English, explains the VIP gold trades (entry, stop loss, targets) and shows where the weekly results are published, losing trades included. Trading is risky; most retail accounts lose money.

Open the SesTrading botOn Telegram

Questions people ask

What is the difference between support and resistance?

Support is below the price: a level where a decline has stopped at least twice because buyers overcame sellers. Resistance is above the price: a level where a rise has stopped at least twice because sellers overcame buyers. When a level breaks it often swaps roles.

How many touches make a level valid?

The lesson says at least two rejections, and the more taps the stronger the level is considered. Draw it as a zone of a few dollars around the turning points on the daily or 4-hour chart, not as a single line.

Should I buy the breakout or wait for the retest?

The lesson waits for the retest. In our gold sample 17 of 21 broken levels were retested within five trading days, so waiting rarely meant missing the move, and it avoided the half of breaks that closed back through the level first.

Where do I put the stop on a retest trade?

Beyond the level with room: 11 of 17 retests in our sample closed back through the level at least once before continuing. One typical candle of the chart you entered on (the median 4-hour gold candle was $30, the 1-hour $15) is a reasonable minimum, and the position size follows from that distance.

What is a false breakout?

A close beyond a level followed, within a day or two, by a close back on the old side. In our sample it happened in 11 of 21 breaks (52%). It is the main reason not to enter on the breakout candle itself.

Is this the full lesson?

No. It is a written summary with the key points and our own measurements added. The course has 87 video lessons in three modules; the bot can tell you about it.

Authorized in the UAESaad Nizar El Soussi, founder of SesTrading, is listed by the UAE Capital Market Authority as an authorized finfluencer (entry 193, added 24 September 2026). Check the official list.