Community Forex Questions
What is a resistance level?
A resistance level is the opposite of a support level.
Looking at a chart, you can find resistance levels – which are areas or levels where prices are usually stopped (resisted) and can't go any higher for a period of time.
Looking at a chart, you can find resistance levels – which are areas or levels where prices are usually stopped (resisted) and can't go any higher for a period of time.
A resistance level in forex is a key price point where an upward-trending currency pair tends to stall or reverse due to increased selling pressure. It represents a psychological or technical barrier where traders historically sell, preventing further price increases. Resistance levels are identified using historical price data, trendlines, or technical indicators like moving averages.
When the price approaches resistance, traders watch for a breakout (price moving above) or a rejection (price falling back). A breakout may signal a continued uptrend, while a rejection suggests a potential downtrend. Resistance levels help traders set profit targets, place sell orders, or manage risk. Combining resistance with support levels enhances trading strategies by identifying high-probability entry and exit points.
When the price approaches resistance, traders watch for a breakout (price moving above) or a rejection (price falling back). A breakout may signal a continued uptrend, while a rejection suggests a potential downtrend. Resistance levels help traders set profit targets, place sell orders, or manage risk. Combining resistance with support levels enhances trading strategies by identifying high-probability entry and exit points.
Jul 19, 2022 19:20