Resistance
A price level where an uptrend tends to pause due to a concentration of supply or selling interest.
Plain-English Meaning
Resistance is like a ceiling. As the price goes up, it hits a point where sellers think the asset is too expensive, causing them to sell and stopping the price from rising further.
Why It Matters
Resistance zones help traders identify where it might be a good time to take profits or look for selling opportunities. It represents a historical barrier where sellers previously took control.
Simple Example
If the EUR/USD pair struggles to rise past 1.1000 three different times, the 1.1000 level is considered a strong resistance ceiling.
This educational example uses selected assumptions for reference calculation purposes. Real conditions may vary by broker, exchange, or instrument.
Beginner Mistake
Placing orders exactly on the resistance line. Prices often reverse slightly before or spike slightly past the line, catching out traders who rely on precise numbers instead of zones.
Note: Resistance levels are reference zones based on historical price behavior. They do not guarantee future price movement.