Resistance

Resistance is a price level where an asset struggles to rise above due to increased selling pressure. It acts as a ceiling that prices hit repeatedly but fail to break through.

Why Resistance Matters in Trading

Understanding resistance helps traders identify where an uptrend might stall. When prices approach this level, many traders expect a reversal or pause, often leading to a sell-off.

Breaking Through Resistance

If an asset breaks through resistance with strong volume, it may signal bullish momentum and lead to a new uptrend. Traders often use this breakout as a buy signal.