Resistance
A price area where selling has previously stopped a rally. Once broken, resistance often becomes support.
In practice
GBP/USD fails to break above 1.2850 several times. A short trade near that area with a stop just above it risks little if the level holds.
Common mistake
Shorting resistance in a strong uptrend. Levels break more often when momentum is behind the move.
Related terms
Support
A price area where buying has previously stopped a decline. Once…
Breakout
A move through support, resistance or a range boundary, often with…
Double top
Two highs at a similar level with a dip between. A break below the…
Pivot points
Support and resistance levels calculated from the previous…
Psychological levels
Round numbers such as 1.1000 or 150.00 where many orders cluster…
Supply and demand zones
Areas where price previously turned sharply, suggesting unfilled…