Resistance and support levels are important technical terms in trading. When the market falls to a support level, there is usually a phenomenon of stopping the decline and building a base, but whether it can reverse depends on how the market moves next; when the market rises to a resistance level, there is usually a need for a pullback. It is difficult to know the market's temporary high or low points without judging resistance and support levels in trading.
☕
The role of resistance and support levels is to prevent or temporarily halt the price from moving in a certain direction. If there is a trending market that wants to continue moving in the direction of the trend, it must break through the upcoming resistance or support levels. For example, to continue rising, it must break through the previous resistance level to create new highs; to continue falling, it must break below the previous support level to create new lows.
Thus, it can be seen that resistance and support levels may eventually be broken. Resistance and support levels do not necessarily prevent the market from rising or falling, but they can temporarily halt the market.
☕
A resistance level is when an upward trend reaches a certain position, where a specific price range exerts pressure on the upward trend, suppressing its movement; we refer to this price range as the resistance level. A support level is when the market is falling, and a specific price range provides support to the market, affecting the speed of the price decline; we refer to this price range as the support level. Resistance and support levels are not precise prices but rather price ranges.
