Trader's Glossary

Resistance Level

When charting an asset’s price action resistance is a price level which the market seems reluctant or incapable of going beyond. In other words it is a level at which selling is likely to occur. Traders often use recent highs to plot resistance lines on the charts they are monitoring because they can be good indicators of imminent trend reversal. The more times an asset’s price fails to break through a resistance level the more that resistance level is reinforced.