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Explore more in detail what is support and resistance & how to find support and resistance. Learn how to trade support and resistance. Also, learn more about its meaning, differences, indicator, & strategy.
What is Support and Resistance in the stock market?
What are Levels?
What is Supply Zone and Demand Zone?
Let’s understand these terms in detail…
What is Resistance?
Resistance is a point where the price makes a high, takes a pause and reverses down from the high. The high point from where the price reversed is called the resistance zone.
What is Support?
Support is a point where the price makes a low, takes a pause and gives a bounce from the low. The low point from where the price bounced is called the support zone.
Support and resistance levels are important points in time where the forces of supply and demand meet. These support and resistance levels are seen by technical analysts as crucial when determining market psychology and supply and demand. When these support or resistance levels are broken, the supply and demand forces that created these levels are assumed to have moved, in which case new levels of support and resistance will likely be established.
Here are some key points to remember about Support and Resistance:
1. When the price passes through resistance, that resistance could potentially become support.
2. The more often price tests a level of resistance or support without breaking it, the stronger the area of resistance or support is.
3. When a support or resistance level breaks, the strength of the follow-through move depends on how strongly the broken support or resistance had been holding.
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