What does Resistance mean?
Resistance is a price zone where upward movement has previously stalled or where traders expect selling pressure to become more relevant. It is usually more useful as an area than as one exact price.
Why it matters
- Resistance can help organize potential reaction and breakout areas.
- A strong move through resistance can change market structure.
- Former resistance can sometimes become support after a successful breakout and retest.
How it works
- 01
A prior swing high, range boundary or repeated rejection area is identified.
- 02
Price later revisits the zone.
- 03
Traders observe rejection, acceptance or breakout behavior.
Example
If price repeatedly fails near 20,200, that area may be treated as resistance. A later close and hold above it can indicate that the earlier resistance has failed.
Common misunderstandings
- Resistance is not guaranteed to hold.
- It is usually a zone rather than an exact tick.
- Repeated tests can change the quality of a level.
Educational reference
This glossary explains terminology and
general market concepts. It is not a
trading signal or a guarantee of future
results.