Support and Resistance for Day Traders

Paul Nawrocki
Aug 20
2 min read

What is Support?

Support is a price level where demand (buying pressure) is strong enough to stop the price from falling further.

When the price approaches support, buyers often step in, creating a “floor.”
If support holds, the price bounces upward.
If support breaks, it often turns into new resistance.

👉 Think of support as the ground traders stand on.

What is Resistance?

Resistance is the opposite: a price level where selling pressure is strong enough to stop the price from rising.

When the price approaches resistance, sellers take profits or short-sellers step in.
If resistance holds, the price falls.
If resistance breaks, it often becomes new support.

👉 Think of resistance as the ceiling traders hit.

How Day Traders Use Support and Resistance

Day traders rely heavily on support and resistance levels because they:

Define key zones for entries and exits.
Help set stop-loss and take-profit orders.
Indicate market psychology – where traders expect reversals or breakouts.

Example 1: Support Bounce Trade

Stock: AAPL
Support identified at $150 (pre-market low).
Entry: Buy near $150 as price approaches support.
Stop-loss: Below $149.50 (to avoid false breakouts).
Take-profit: $152 (previous intraday high).

👉 Here, you risk $0.50 for a potential $2 gain → 1:4 risk-to-reward.

Example 2: Resistance Breakout Trade

Stock: TSLA
Resistance at $700 (multiple failed attempts to break).
Entry: Buy when price breaks above $700 with strong volume.
Stop-loss: $695 (just below breakout zone).
Take-profit: $715 (next historical resistance).

👉 This trade targets momentum – day traders love breakouts.

How to Find Support and Resistance Intraday

Pre-market highs and lows – critical levels for day traders.
Previous day’s high/low and close – often act as magnets for price.
Round numbers – levels like $50, $100, $1000 are natural support/resistance zones.
VWAP (Volume Weighted Average Price) – institutional traders use it as dynamic support/resistance.
Moving averages (e.g., 20 EMA, 50 EMA) – often act as intraday barriers.

Pro Tips for Day Traders

Volume is key: The more volume at a level, the stronger it is.
Don’t place stops exactly on support/resistance – market makers often “stop hunt.” Put them slightly beyond.
Multiple timeframes: Use daily/weekly charts for major levels, then zoom into 1–5 min charts for intraday precision.
Breakout confirmation: Wait for a candle close above resistance (not just a quick spike) before entering.
False breakouts: Be prepared – sometimes the best trade is fading a failed breakout.

Fun Fact (Market Psychology)

Support and resistance work because of self-fulfilling prophecy.

Thousands of traders watch the same levels.
When price approaches, they react together (buy at support, sell at resistance).
That collective action makes the level hold – until it breaks.

✅ Summary: For day traders, support and resistance are the foundation of intraday strategy. They define where to enter, where to cut losses, and where to take profits. Used with volume and risk management, they can transform random trades into structured, high-probability setups.