resistance
A price area where sellers stepped in before, so a rise often stalls or turns there.
Resistance is a price area where selling has previously appeared and a rising price has slowed or turned. It is an area to observe, not a ceiling that must stop every rise.
Participants may notice similar past highs, but a later attempt can stall, pass through, or reverse. The area helps describe earlier price behavior; it cannot confirm what will happen next.
Example
Harbor 20 Index Fund reached $50 twice and then closed near $48 and $49. A learner marks $49–$50 as a possible resistance area, which is $1 wide. A later price of $49.60 falls inside because $49 ≤ $49.60 ≤ $50. The earlier stalls make the area noticeable, but they do not show whether a future rise will stop there.
Common mistakes
- Treating resistance as a precise line. Several nearby highs can form a zone.
- Assuming price cannot rise above resistance. The price can pass through it.
- Moving the marked area to fit each new candle. Decide how to mark it consistently.
- Taking resistance as proof of a future fall. Most people who trade lose money.
Learn it in the course
- Support, resistance and breakouts · Mark the prices where the market turned before, and see why a breakout can be real or a trap, and what a level can and cannot tell you.
- Case: mark up a chart and write the plan · Mark the trend and the levels on a Pebble chart, then write when you would enter, where the stop goes and when you stay out, without forecasting.