I mean a lot of experts always mention about them, so surely they aren't bullshit.

But how actually that can happen ?

When the markets buy or sell at certain price in a great size, then if later on the price comeback there if it can pass those support/resistance then it can break and move farther while if it can't break it, it will retrace back....

So what is the reason behind this ?

Answer
support/resistance applies to stocks as well as Forex or other commodities.

It is quite established and quite reliable ...the way to think of these levels is to think about the battle between buyer/seller and supply/demand

Let us say I am selling tomatoes in a market. I decide that a good price for me is $1/lb and I sell a lot of them...buyers like the price and they sell....I am running out of tomatoes so I decide to sell the tomatoes at a higher price...say $1.50...I don't sell the same number but heck I am making 50% more per pound....so I raise the price again as there are far fewer tomatoes and I don't get a new shipment for a couple of days...I raise my price to $2.00/lb....Buyers think this price is too much...they don't buy them anymore $2.00/lb is a resistance level....

I have fewer and fewer buyers so ok...I made a mistake and lower my prices back to $1.50 and I get a few more buyers...but then my next shipment arrives and I have tons of tomatoes...If I don't sell them they will spoil...So I reduce my price back to $1/lb...the buyers increase but still not enough of them to take all my tomatoes....so I reduce my price to $0.75/lb...but the buyers want them for $0.50/lb...this is below my cost....I would lose money selling them that low....I dig in my heels and demand $0.75....that $0.75 becomes a support price.

As my supply of tomatoes reduces and the demand increases for them...I can raise my prices again to $2.00 where the Buyers say they are too expensive and stop buying....this rise and fall of price goes on for some weeks....I refuse to sell less than $0.75 and the buyers refuse to pay more than $2.00

But winter comes...my resupply of tomatoes is not as great as before...I raise my prices to $2.00/lb...the buyers baulk at that price but the supply of tomatoes everywhere is very low....I stick to my price at $2.00/lb...Perhaps I am the only source of tomatoes for miles around....Suddenly I realize that the buyer WILL pay more for those tomatoes...I raise my prices to $2.25 People buy because they need those tomatoes...I have broken that resistance at $2.00.....NOW I say that will be my bottom price for the next while until the spring when tomatoes are plentiful again.....that resistance of $2.00 has now changed into a support level....

I don't know where the resistance level of the buyer is now so I gradually increase my price until I find where the Buyers say no....that becomes the next resistance level.

The same thing happens to stock price, forex and commodities....when you study charts you will see support/resistance levels establish themselves...Often for no apparent reason these levels last many months...when the price breaks these levels up or down the movement can be pretty strong...especially if the price rises to a resistance or falls to a support only to rebound in a reverse direction to try again.

Think of it like a battering ram hitting a door....repeated hits weaken the door and when it breaks people rush through to the next door....the more difficult it is to pass these levels the harder it is to reverse backward once passed.

I hope these analogies help sometimes it makes it easier to think of stock/forex/commodity prices as a battle between buyer/seller.

What would be a good stock trading strategy for using a Trailing Stop ?

Want to trade stocks short-term (online) and need advice from successful traders. Thanks for your time and advice!

Answer
Obviously you need to figure out where to place the stop initially before it starts trailing. There are a couple choices -
1. Select a price some stop loss % (2, 3, 4, 5% - whatever you're comfortable with) or
2. Base your initial stop on a support level.

Method 2 is what is normally used in Forex trading. In stocks I use mental stops as opposed to actually placing the order but I'm reviewing my charts a couple times a day so I know where my stop-loss is at and I have access to a computer all day. The concept is that if a stock starts to drop it will tend to halt its decline at a support level, at least temporarily. If support holds, price will bounce off of it and start rising again. If support breaks down, price will likely continue to fall. Price will probe the support and go below it temporarily then rise back to or above it while it is testing support so you want to have your initial stop at some tolerance below the support level.

Here's an example of how to set the initial stop -
Refer to the following chart:
http://stockcharts.com/h-sc/ui?s=NTO&p=D&yr=0&mn=10&dy=0&id=p52292255501&a=74443331&listNum=25

Once you decide on a stock, determine the support/resistance levels as shown by the horizontal red/green lines. Near todays action there is support/resistance at these prices:
3.92, 4.00 (natural), 4.19, 4.40, 4.61

Let's say you wanted to buy at 4.15 on Wednesday. There is natural support (even dollar amount) at 4.00 and 3.92.
1. Determine what your loss tolerance is - let's say 5%
2. Determine how much tolerance below the support level you want to be ~ 2%
3. Determine where 2% is below support - 4.00 minus (4.00 * 2%) = 3.92
4. 3.92 would be your stop.
5. Determine how much of a loss you would take if stopped out - about 5.5 %
6. Determine if 5.5% is within your loss limit. If so, you would place the stop at 3.92 and if not, you have to decide whether to move the stop closer to support (increases the risk of getting stopped out) or not make the trade.

Once prices starts moving up, you have the choice of changing the stop to a trailing stop or to calculate a new support minus 2% stop price and manually change the stop.

All this may sound like more work than you want to do but after you do it 5-6 times, you will start to recognize the stop prices in a glance.