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Here’s a short post on identifying support and resistance in trading:

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Understanding Support and Resistance in Trading

Support and resistance are key concepts in technical analysis, helping traders identify potential price reversal levels in any financial market.

Support refers to a price level where an asset tends to stop falling and reverse direction. At this level, buyers step in, creating demand and pushing the price upward. This happens because the price is perceived as a good buying opportunity.

Resistance works in the opposite way. It's the level where a rising price tends to reverse due to selling pressure. At this point, traders believe the asset is overvalued and begin selling, causing the price to fall.

Both support and resistance can be identified using historical price data, trendlines, and moving averages. They are not exact levels but zones where price reactions occur. Over time, these levels can flip – support may become resistance and vice versa, depending on market trends.

Traders use support and resistance to plan entry and exit points, set stop-loss orders, or identify breakout opportunities. Mastering this concept helps enhance decision-making in both short- and long-term trading strategies.

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This post outlines the basics while staying within the 200-word limit.

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