Support and resistance are critical concepts in technical analysis:
1. **Support** is a price level where buying interest is strong enough to prevent the price from falling further. It represents a zone of demand and is seen as a potential buying opportunity.
2. **Resistance** is a price level where selling interest is strong enough to prevent the price from rising further. It represents a zone of supply and is seen as a potential selling opportunity.
3. These levels are not fixed prices but rather zones where buying or selling pressure tends to concentrate.
4. Traders use various technical tools to identify support and resistance levels, such as trendlines, moving averages, and chart patterns.
5. Support and resistance levels help traders make decisions about entering or exiting trades, setting stop-loss orders, and managing risk.
6. When a support level is breached, it may become a new resistance level, and vice versa.
7. While support and resistance levels can be reliable indicators, they are not foolproof and should be used in conjunction with other analysis methods.
1. **Support** is a price level where buying interest is strong enough to prevent the price from falling further. It represents a zone of demand and is seen as a potential buying opportunity.
2. **Resistance** is a price level where selling interest is strong enough to prevent the price from rising further. It represents a zone of supply and is seen as a potential selling opportunity.
3. These levels are not fixed prices but rather zones where buying or selling pressure tends to concentrate.
4. Traders use various technical tools to identify support and resistance levels, such as trendlines, moving averages, and chart patterns.
5. Support and resistance levels help traders make decisions about entering or exiting trades, setting stop-loss orders, and managing risk.
6. When a support level is breached, it may become a new resistance level, and vice versa.
7. While support and resistance levels can be reliable indicators, they are not foolproof and should be used in conjunction with other analysis methods.
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