Support and resistance levels are important in trading because they indicate the levels at which a security's price tends to stop falling or rising, respectively. These levels are often used by traders to determine where to enter or exit a trade. Support levels are typically seen as areas where demand for a security is likely to increase, while resistance levels are seen as areas where selling pressure is likely to increase. Traders often use technical analysis to identify these levels and make trading decisions based on them. Additionally, support and resistance levels can also be used to set stop-loss and take-profit levels. Overall, understanding and utilizing support and resistance levels can help traders make more informed and profitable trading decisions.

Support and resistance are fundamental concepts in technical analysis, helping traders identify key price levels where buying or selling pressure may emerge. Support is a price level where demand is strong enough to prevent further declines, acting as a floor. Resistance is where selling pressure halts upward movement, acting as a ceiling.

These levels help traders make informed decisions—buying near support and selling near resistance. They also assist in setting stop-loss and take-profit levels, improving risk management. Breakouts above resistance or below support signal trend reversals or continuations, offering profitable opportunities.

By analysing historical price action, traders gain insights into market psychology, enhancing their strategies. Mastering support and resistance improves timing, reduces emotional trading, and increases profitability.