Technical

Resistance

A price level where selling pressure tends to overcome buying pressure, preventing further price increases.

Definition

Resistance is a price level where supply is strong enough to prevent price from rising further. Sellers enter at resistance, creating a "ceiling" where price tends to reverse. Breaking resistance can signal further gains.

How It Works

Price approaches resistance level
Sellers enter, creating supply
Price reverses or consolidates
Break above = potential further gains

Types of Resistance

Horizontal Resistance

Previous highs, round numbers

Trend Line Resistance

Falling resistance in downtrends

Moving Average Resistance

Price rejected at MAs

Trading Tips

Place take profit at or before resistance when long

Broken resistance can become support

Look for confluence of multiple resistance levels

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