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Price Action

How to Draw Support and Resistance Correctly

A level drawn at the exact wick is crossed by wicks; a level drawn as a zone from the wick to the nearest close and read on the close is not. This paper shows you a real gold ceiling drawn the right way, what a standout high is, the four steps from finding it to reading it, the zone on the daily chart with its four tests and its break, and how to set the line's exact price and description on your platform.

Difficulty
Beginner
Reading time
6 min
Pages
8
Reviewed by
Saman Rahbar

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Where to draw it

The first mistake is drawing the line at the exact wick — the thin line beyond the body of the candle. Gold made a high of 3365.72 on 3 July 2025, and the highest close beside it was 3357.26, on 2 July. Draw the level as the zone between the two, nine dollars thick, rather than a line at either. Over the next two weeks four days reached between one and twelve dollars over the wick line, and every one of them closed back under the zone. A line at the wick alone was crossed four times. The zone, read on the close, was not.

What stands out

A level starts from a high or a low that stands out. The rule is simple: a high that no day within five on either side has reached, or a low that no day within five on either side has gone under. The 3 July high is one — 3365.72 is taller than the five days before it and the five after. Two days each side would find many more highs and lows, and the chart would fill with lines; five days each side keeps the ones that stood out from their whole fortnight.

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