ResistanceBack to Glossary
In technical analysis resistance is a level that the price of an asset has repeatedly tried and failed to break above. These levels are identified and plotted on the chart in order to help traders apply their own trading strategies. For instance, if you know that a certain level has historically acted as resistance and you see the price heading towards it with low volume and limited momentum, you may not want to go long as there’s a high risk that the asset you’re trading will be rejected from this level and retrace back down. When, however, the price does finally break above a resistance level and trade consistently above it, this resistance level becomes the new support.
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