How to Trade Support and Resistance Breakouts - Complete Price Action Guide for Beginners
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Price Action Trading Strategies: Complete Guide to Support, Resistance & Breakout Trading in 2026
By AmeriMonde Trading Team | Updated: May 2026 | 22 min read | 2200+ Words | Educational Guide With Handmade Drawings
If you can read support and resistance on the floor, you can trade any market. Welcome to AmeriMonde Trading.
This guide is based on my handmade drawing on grid paper — green descending resistance on top, red horizontal support at bottom, bullish breakout dashed green arrow up, bearish breakout dashed red arrow down. I learned price action by laying 4 ropes on the floor, drawing descending triangle with green marker for resistance, red marker for support, blue marker for price action strategies, and taking HD photos with flash for my journal.
This guide is for education only. Not financial advice. No buy/sell recommendation.
What Is Support and Resistance? Simple Floor Definition
Support and resistance are not thin lines. They are thick rope zones where orders sit. Support is floor where buyers defend. Resistance is ceiling where sellers defend. In my floor method, I lay ropes physically — you can feel where price will bounce or reject. This is how I learned before using TradingView.
SUPPORT - Red Horizontal Line In The Drawing
In the drawing, the bottom red line is support. Price drops to same level 3 times and bounces. Why? Buy orders waiting. On the floor, red rope is laid horizontal to show floor. Each time price touches floor, buyers push up with green ropes. Support is marked with red marker and labeled SUPPORT below.
How to identify real support:
- At least 3 touches on same price zone
- Each touch shows bullish rejection wick
- Volume increases on bounce
- Time spent at level — longer is stronger
If support breaks and closes below, floor collapses, trapped buyers must sell, price falls fast. That is bearish breakout.
RESISTANCE - Green Descending Line In The Drawing
Top green line sloping downwards is resistance. Labeled RESISTANCE in red marker. Each time price tries higher, it makes lower high. First high 100, second high 95, third high 90. Sellers more aggressive each time. On the floor, green rope is laid sloping down to show ceiling. Price hits ceiling and drops.
Why descending resistance is dangerous:
- Shows sellers getting stronger
- Buyers getting weaker
- Compression to one point
3 touches minimum to be valid resistance. My drawing shows exactly 3 touches on green line before breakout.
Descending Triangle: Why Wait Outside, Not Inside
The drawing shows 4 zigzags inside triangle — green up, red down, green up, red down. This is battle inside triangle. Buyers defending support, sellers defending resistance. Range gets smaller to the right. This is compression. Smart money waits outside.
Inside the triangle, win rate is 50/50. Outside, win rate jumps. That is why my rule is: Never trade inside triangle. Wait for breakout candle to close outside.
Volatility inside is low, then explodes outside. The drawing shows this triangle in middle with 4 zigzags inside. The end of triangle is called apex. Near apex, breakout is coming 80% of time.
Price Action Trading Strategy 1: Bullish Breakout
Green dashed arrow going up in drawing shows bullish breakout.
When it happens: Price breaks above green descending resistance and closes above with strong bullish candle. Full body, not wick.
My Complete Plan (Educational Example):
- ENTER: After breakout candle closes above resistance, enter on retest of resistance as new support. Don't chase green candle directly.
- STOP LOSS: 15 pips buffer below broken resistance or below last swing low inside triangle. Red marker level. In my floor method, I place red rope 15 pips below.
- TARGET 2X: Measure triangle height at start. Example if triangle height 60 pips, target 120 pips above breakout. Risk to reward 1:2 minimum. I always use 1:2 or more.
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