Last updated: 8 October 2026. MoreLess
Every screenshot below was recorded on 8 October 2026 on an IQ Option Practice account registered in Brazil, on 5-minute EUR/USD candles. We placed no real-money trade. Support and resistance are drawn by hand, so the tested box does not test hand-drawn levels. It tests a fixed rule that stands in for them (the lowest low and the highest high of the previous 60 candles) together with the RSI, and it shows what that rule did on 5-minute EUR/USD candles recorded from 29 September to 5 October 2026. It says nothing about what the rule will do next.
No indicator replaces support and resistance: the levels come from price, and IQ Option’s own blog says to start from price structure and to use an indicator, if at all, as a secondary filter. The RSI can still help at a level, because it shows whether momentum is fading as price comes back to it. This guide shows how to add the RSI and draw levels on IQ Option’s chart, states what RSI divergence means, and tests a fixed rule that stands in for hand-drawn levels.
Quick answer
- Which indicator: no indicator replaces support and resistance. IQ Option’s blog says to start from price structure and to use an indicator, if at all, as a secondary filter.
- RSI: compares recent gains with recent losses on a scale from 0 to 100. Defaults in the traderoom on 8 October 2026: period 14, levels 70 and 30.
- Divergence: price makes a new high or low that the RSI does not confirm, a higher price high with a lower RSI high (bearish) or a lower price low with a higher RSI low (bullish). It is a warning that needs a price trigger, not a signal on its own.
- Entry idea: price returns to a level, closes back off it, and the RSI is stronger than at the previous low (support) or weaker than at the previous high (resistance). Name the price that proves the idea wrong before you enter.
- Binary option: no stop loss and no take profit; it closes at expiry.
- Test result: on 1,334 five-minute EUR/USD candles (29 September to 5 October 2026) the stand-in rule fired 60 times (41 Higher, 19 Lower) with a three-candle expiry and won 30 of 59 decided trades (50.8%), below the 54.1% break-even rate at an 85% payout. A short replay predicts nothing. With 59 trades the win rate has a margin of error of about ±7 points (one standard error), so 50.8% cannot be told from break-even.
Which indicator is best for support and resistance?
None of them. Support and resistance are not indicators. IQ Option’s blog describes the levels as zones where buying or selling pressure has shown up often enough that, the next time price returns, something reactive tends to happen more often than not, and it says plainly that they are not magic lines the market respects. Its FAQ asks whether indicators replace support and resistance and answers no: indicators summarize price action, so start from price structure and use an indicator, if you use one at all, as a secondary filter rather than as an anchor.
The RSI is one such filter. The Relative Strength Index compares the strength of recent price gains with recent losses and plots the result from 0 to 100. On most charts a reading above 70 is called overbought and below 30 oversold. The blog stresses that these levels describe what price has been doing and do not predict the next candle, and that the RSI describes the move already on the chart; it does not choose the trade. What it adds at a level is a second piece of evidence about momentum: is it still strong, or is it fading?
Setting up the RSI indicator on your IQ Option account
Three steps add the RSI to the chart on the web traderoom (see the IQ Option platform overview). The numbers in each screenshot match the numbers in the text.
Step 1: Open Chart analysis
Click the indicators button, the wave icon in the chart toolbar at the bottom left of the chart (1). The Chart analysis panel opens with the tabs Indicators, Templates, Widgets and Scripts.
Step 2: Find the RSI
On the Indicators tab, type “RSI” into the search box, “Search for indicators” (1), and click the Relative Strength Index (RSI) result (2). The indicator is also in the Popular and Momentum lists.
Step 3: Check the settings and click Apply
The dialog opens with the tabs How to use and Set up & apply, and the settings are on Basic settings (1). On 8 October 2026 a new RSI started with Base line – Period at 14 (2) and the levels Overbought at 70 and Oversold at 30 (3); the dialog has no box for the averaging method. Click Apply (4). The RSI appears in a panel at the bottom of the screen, below the price chart.
How do you indicate support and resistance?
You draw them. IQ Option’s blog uses the horizontal line from the Graphical Tools menu. Two steps place the levels.
Step 4: Open the drawing tools
Click the drawing tools button in the chart toolbar, the pencil icon (1). The Graphical tools menu opens with Line, Trend Line, Horizontal Line, Vertical line and Fibonacci Lines; choose Horizontal Line (2).
Step 5: Draw support and resistance
Look for the most recent swing low and swing high that anyone would agree on. A swing low is a trough with higher lows on both sides, a swing high is a peak with lower highs on both sides, and the ones worth marking were followed by a visible move away. Place a horizontal line at the price of the swing low for support (1) and one at the swing high for resistance (2). In the screenshot the two blue lines were drawn by hand on 5-minute EUR/USD candles (29 September 2026, 15:00 to 20:30 platform time). IQ Option’s blog treats each level as a zone rather than a hairline, about 0.25 × ATR(14) wide as a starting point, wrapping the cluster of candle bodies around a wick and not only its tip, and it keeps at most five levels on the chart it trades. ATR(14) is the average true range of the last 14 candles, a measure of how far price has been moving.
Which trade length suits RSI and support/resistance?
IQ Option’s articles say the RSI can be used on any asset and any time frame, and that its period counts candles of the chart’s own size: a setting of 14 uses daily changes on a daily chart and changes between 15-minute closes on a 15-minute chart, “but the market window is completely different”. None of them says that a longer trade suits the RSI and support and resistance best. This guide uses 5-minute candles and trades of 15 to 30 minutes, which is three to six candles.
How the RSI is calculated
The RSI is a momentum oscillator developed by J. Welles Wilder Jr. It compares recent upward and downward price changes and converts the result into a number from 0 to 100.
| Step | Calculation |
|---|---|
| RS | Smoothed average gain ÷ smoothed average loss |
| RSI | 100 − 100 ÷ (1 + RS) |
If the average gain is three times the average loss, RS is 3 and the RSI is 75. Equal average gains and losses give an RSI of 50. A 14-period RSI needs 14 price changes before its first value appears. IQ Option’s blog notes that platforms can show slightly different values because of price feeds, candle boundaries and available history, and that a one-point gap is not a trading signal.
The blog calls 14, 70 and 30 a common reference and not optimized settings. An IQ Option blog article on the RSI describes two presets, and it adds that wider levels give fewer readings and closer levels give more.
| Preset (IQ Option’s blog) | Period | Oversold level | Overbought level |
|---|---|---|---|
| Standard | 14 | 30 | 70 |
| Conservative | 21 | 20 | 80 |
What RSI divergence means
RSI divergence compares the direction of price extremes with the direction of RSI extremes. Bearish divergence appears when price makes a higher high while the RSI makes a lower high. Bullish divergence is the opposite: price makes a lower low while the RSI makes a higher low. IQ Option’s blog gives this illustration: price rises from 100 to 111, the RSI reaches 81 at the first high but only 69 at the second, higher high, and that is bearish divergence. Put another way, price movement that the RSI does not confirm can signal a trend shift.
Divergence is about whether a new price high or low is matched by the RSI, not about price and the RSI moving in opposite directions from one candle to the next.
Divergence is a warning that the second push had weaker momentum. The blog adds that it does not identify the entry by itself, that some divergences fail, and that a price trigger is needed, for example a close beyond the most recent pullback. If price closes above the latest high, the divergence has failed.
How do you identify strong and weak support and resistance?
IQ Option’s blog does not give levels a strength score. It ranks them with a few rules instead:
- Start with obvious swings. Mark the most recent swing high and swing low that anyone would agree on, the ones that caused a visible move afterwards.
- Quality over count. Two high-quality reactions, with a clear move away and visible rejection, beat four weak taps in a choppy market.
- Two time frames, never more. A level on the entry chart is high priority only if a level on the higher chart agrees with it.
- Five levels at most on the chart you trade. If you cannot rank your levels, you do not understand them well enough to trade them.
- Levels can change roles. When support breaks with real acceptance, the zone flips sides and can act as resistance.
- Know when to give up on a level. When price closes convincingly beyond it on your entry chart and does not come back, the level is done. One candle is not enough; two or three closes with no return usually are.
The blog says touches are overrated.
Which time frame is best for support and resistance levels?
The one you can actually manage, says IQ Option’s blog: if you cannot watch a 1-minute chart, do not anchor trades to 1-minute noise. Its article on time frames (updated 13 September 2026) says there is no universal answer. It names the 5-minute and 15-minute charts as the usual choice for day traders, with the 1-hour chart for context, and notes that the 5-minute chart needs higher-timeframe context while the 1-minute chart is usually too noisy for beginners. The support and resistance article pairs them the same way: a trader on the 5-minute chart looks at the 1-hour chart, and one on the 15-minute chart at the 4-hour chart.
This guide uses 5-minute candles on EUR/USD for trades of 15 to 30 minutes. Step 6 sets the candle size.
Step 6: Choose the candle size
Click the candle time period button in the chart toolbar (1) and choose 5 minutes for entries (2). To mark the levels, switch to the higher time frame the same way, draw them as in Step 5, and come back to this size.
Analyze your chart and identify the support/resistance level
Mark the swing low and swing high on the higher time frame as in Step 5, then go to the entry chart and wait for price to come back. At a level, ask three questions:
- Did price react? A close back off the level is a reaction. A touch alone is not a signal.
- What is the RSI doing compared with the previous extreme? A higher low than at the earlier low at support, or a lower high than at the earlier high at resistance, is divergence in the sense above. An RSI above 70 or below 30 on its own is only a momentum reading.
- Where is the idea wrong? A close beyond the level, not on its edge.
IQ Option’s blog gives an illustrative example of the RSI at a range boundary. Price has held between support at 98 and resistance at 104. It trades above 104 during the day and the RSI reaches 74, but the candle closes back inside the range at 103.70. The blog’s reading: price rejected a tested boundary, the RSI turned down and crossed back below 70, the idea is wrong if price closes back above the rejection high, and the first area to review is the middle of the range, not automatically the opposite boundary. If price closes above 104 and holds there, it is no longer a range reversal: the RSI does not overrule the breakout. This is the blog’s example, not one of our charts.
IQ Option’s blog says the RSI describes the move already on the chart and that an extreme or a divergence still needs a price trigger, which is why the test below asks for a divergence and a close back off the level.
Enter into a long-lasting position with a trade of 15 to 30 minutes
The long entry is this: price falls back to the support level, the RSI shows a divergence (it is higher than at the earlier low), and the entry is a Higher option held for 15 to 30 minutes, which is three to six candles on a 5-minute chart. Read with the definition above, the conditions are:
- Price returns to the support zone and a candle closes back above it.
- The RSI at this low is higher than it was at an earlier low at least five candles back, while price is at or below that earlier low.
- You have named the price that proves the idea wrong: a close below the zone.
A binary option has no stop loss or take profit and closes at expiry. A CFD (margin) trade has both.
Example on 5-minute EUR/USD candles, 29 September 2026. Times are UTC, with the platform clock (UTC-3) in brackets. Here the red line is the Lowest Low indicator with a period of 60, the stand-in for a hand-drawn support. The earlier low (1) is the long red candle that opened at 07:30 UTC (04:30); its low of 1.13427 set the line, and the RSI fell to about 11.5 on it (2), far below the 30 line. The signal candle (3) opened at 08:30 UTC (05:30), 12 candles later. Its low, 1.134395, was within half an ATR(14) of the line (ATR 0.00037) and it closed at 1.134415, above it, with the RSI at about 33.3 (4), higher than at the earlier low. The entry was at the close, 08:35 UTC (05:35), at 1.134415, with the option expiring 15 minutes later, at 08:50 UTC (05:50). The candle that closed at the expiry (5) opened at 08:45 UTC (05:45) and closed at 1.13459, above the entry: a win. The next three candles (08:35, 08:40 and 08:45 UTC) fired the same signal at the same low, so they are repeats of one setup and not four independent trades; all three also won. A win does not make the rule right: over the whole test the rule won 30 and lost 29 of its decided trades. RSI values are the test’s figures; on the screenshot the RSI line is plotted at the close of each candle, which is why the numbers 2 and 4 sit a little to the right of their candles.
Enter long-lasting sell position with a trade of 15 to 30 minutes
The short entry is the mirror image: price rises back to the resistance level and a candle closes back below it, the RSI at this high is lower than at the previous high while price is at or above that high, and the entry is a Lower option held for the same three to six candles. A close above the zone shows that the idea has failed.
Example on the same day. Here the green line is the Highest High indicator with a period of 60, the stand-in for a hand-drawn resistance. The earlier high (1) is the candle that opened at 18:40 UTC (15:40); its high of 1.134365 set the line, with the RSI at about 72.2 (2). The signal candle (3) opened at 20:50 UTC (17:50), 26 candles later. Its high, 1.134315, was within half an ATR(14) of the line (ATR 0.00028), it closed at 1.134255, below the line, and the RSI was about 71.7 (4), half a point under the earlier peak: on the screenshot the two RSI peaks look level, so this setup passes the rule by a very small margin. The entry was at the close, 20:55 UTC (17:55), at 1.134255, with the expiry 15 minutes later, at 21:10 UTC (18:10). The candle that closed at the expiry (5) opened at 21:05 UTC (18:05) and closed at 1.134045, below the entry: a win for the Lower option, although the candle at 21:00 UTC had poked above the line to 1.13459 first. The next candle, 20:55 UTC (17:55), fired the same signal at the same level, a repeat of the same setup; it entered at 1.1342 and its expiry at 21:15 UTC closed at 1.13426, above the entry: a loss.
Tested on IQ Option: 29 September to 5 October 2026
| Asset and candles | EUR/USD (binary), 5-minute candles recorded from IQ Option’s Practice traderoom, from 29 September 2026 01:55 UTC to 5 October 2026 17:05 UTC: 1,334 candles in two unbroken runs (the weekend gap separates them). |
|---|---|
| Support and resistance | Drawn by hand in the article, so the test uses a stand-in that a program can run: support is the lowest low and resistance the highest high of the 60 candles before a candle (the lines the platform’s Lowest Low and Highest High indicators draw with a period of 60). A candle touches a level when it comes within half an ATR(14) of it or goes beyond it. |
| Rule tested | Higher: the candle touches support, that earlier low is at least five candles old, the candle closes above it, and the RSI(14) is higher than it was at that earlier low. Lower: the mirror at resistance, with the RSI lower than it was at that earlier high. Entry at the close of the signal candle, expiry three candles. |
| Signals | 60 signals: 41 Higher and 19 Lower. |
| Outcomes | 30 wins, 29 losses, 1 tie. Win rate of decided trades: 50.8% (30 of 59). Net result per dollar staked at an 85% payout: -$0.06 (a tie returns the stake). |
| Break-even | A trade has to win more than 1 / (1 + payout) of the time: about 54.1% at an 85% payout, 53.5% at 87%. Payout during the test: assumed to be 85%, because the replay placed no orders (IQ Option showed 91% for EUR/USD binary options expiring within about ten minutes on 5 October 2026 and 82% to 91% on options on 2 to 4 October; at 91% the break-even rate is 52.4%). |
This is a replay of a fixed rule on candles recorded from IQ Option’s Practice traderoom, not an order placed on the platform, and a fixed rule is not the same thing as levels drawn by eye. It used no real money and placed no order, so the result says nothing about what the rule will do next. Signals are not de-duplicated: neighbouring candles can each give a trade at the same level, and the trades overlap in time. The replay scores each trade from the close of the signal candle to the close at expiry, counts an equal close as a tie and ignores spread and delays. The RSI is smoothed with an exponential average (alpha 2/15). We chose it because it matches the RSI line the platform drew on the 29 September candles in our screenshots to within about a point; Wilder’s smoothing, which the platform’s dialog does not offer, differs from the platform’s line by several points. A second run with Wilder’s smoothing gave 65 signals and a win rate of 50.0% (32 of 64). With 59 decided trades one standard error of the win rate is about six and a half percentage points. A short test predicts nothing; IQ Option’s blog on backtesting says most strategies need dozens, often hundreds, of trades before the results mean anything. Nothing here is a promise of profit or of any win rate.
Pros and Cons
| Pros | Cons |
|---|---|
| The RSI adds a second piece of evidence at a level: whether momentum is still strong or fading. | Levels are placed by eye, so two traders draw different ones, and a level can fail. |
| Both tools can be used on any asset and any time frame. | Divergence is a warning, not a trigger, and some divergences fail. |
| The test rule can be written down and tried on the Practice balance. | In a strong trend the RSI can stay above 70 or below 30 while price keeps going. In our replay of the stand-in rule on 1,334 five-minute EUR/USD candles it fired 60 times and won 30 of 59 decided trades (50.8%), below the 54.1% break-even rate. |
Interesting Facts About RSI and Support/Resistance
| RSI facts | Support and resistance facts |
|---|---|
| Developed by J. Welles Wilder Jr., according to IQ Option’s blog. | Levels reflect peaks and troughs on the price chart: places where price turned before. |
| Values run from 0 to 100; on most charts above 70 is called overbought and below 30 oversold. | Besides horizontal levels there are inclined ones, called trend lines; moving averages and round numbers are variations on the same idea. |
| Wilder used a smoothing period of 14, and 14 is still the common setting. | Touches are overrated: two high-quality reactions beat four weak taps. |
| Divergence compares price extremes with RSI extremes and needs a price trigger. | A broken support can turn into resistance once price accepts the new side. |
Common mistakes
- Calling any opposite move “divergence”. Compare the new price high or low with the RSI high or low at the same swing.
- Reading 70 or 30 as an automatic signal. IQ Option’s blog says an RSI above 70 is not a sell by itself and below 30 is not a buy by itself; in a strong trend it can stay there.
- Trading the touch. Wait for the candle to close back off the level.
- Using the RSI to pick the level. The level comes from price. The RSI only comments on momentum there.
- Drawing the level after choosing the trade, or moving it when price disagrees. The blog lists both among the mistakes it sees repeatedly.
- Looking for a stop loss on a binary option. There is none; the option closes at expiry.
Related guides
- How to draw support and resistance lines on IQ Option
- RSI indicator on IQ Option: the 30 and 70 levels
- Types of divergence on IQ Option
- Stochastic with support and resistance
- RSI Law strategy on 5-minute charts
- Bollinger Bands and RSI
- Time frames on IQ Option
- All indicator guides and all strategy guides
Frequently Asked Questions
Q: Which indicator finds support and resistance?
A: None replaces them. Support and resistance come from price: swing highs and lows, drawn as zones. IQ Option’s blog says to start from price structure and use an indicator, if at all, as a secondary filter. The RSI is one such filter.
Q: What does RSI divergence mean?
A: Price makes a new high or low that the RSI does not confirm. Bearish divergence is a higher price high with a lower RSI high; bullish divergence is a lower price low with a higher RSI low. It is a warning that needs a price trigger, and some divergences fail.
Q: Can I use RSI and support/resistance on any trading instrument?
A: IQ Option’s blog says the RSI can be used on any asset and any time frame. Instruments still differ: the blog notes that gold does not behave like EUR/USD and that single stocks can gap on earnings.
Q: Which time frame suits support and resistance levels?
A: The one you can actually manage. IQ Option’s blog suggests two time frames: levels from a higher one and entries on the lower one, for example the 1-hour chart for context and the 5-minute chart for entries.
Q: How do I know when to enter a trade using RSI and support/resistance?
A: Look for price returning to a level, a close back off it, and an RSI that is weaker than at the previous high (at resistance) or stronger than at the previous low (at support). Name the price that proves the idea wrong before you enter.
Q: How do I identify strong and weak support and resistance levels?
A: IQ Option’s blog ranks them by quality of reaction, not by the number of touches: two clear reactions beat four weak ones. It also keeps at most five levels, draws zones instead of lines and prefers a level that a higher time frame agrees with.
Q: What RSI settings should I use?
A: IQ Option’s blog starts from a period of 14 with levels 70 and 30 and says they are a common reference, not optimized settings. Change a setting only when you can test a fixed entry, exit and invalidation rule with it.
Q: Does RSI divergence always work?
A: No. If price closes beyond the latest high or low, the divergence has failed. The blog says a proper test has to include the failed signals, not only the clean ones.
Q: Can RSI and support/resistance be used with other technical indicators?
A: Yes. IQ Option’s blog says the RSI is rarely used on its own and can be combined with other indicators such as Bollinger Bands or the Alligator.
Q: What win rate does a trade need to break even?
A: A binary option pays a fixed percentage. At an 85% payout a trade needs to win more than 54% of the time to break even (1 ÷ 1.85); at 87% the figure is 53.5%. Read the payout next to the asset when you trade.
