Resistance Level
A resistance level is a price zone on a chart where selling pressure has historically been strong enough to prevent prices from rising further, causing reversals or slowdowns in upward momentum. Resistance forms because traders who bought at lower prices take profits near these levels, while new sellers enter anticipating a reversal. When resistance is broken convincingly, it often becomes a new support level β a concept known as role reversal. Traders use resistance levels to plan short entries, set profit targets on long positions, and assess the risk-reward profile of trades approaching these critical zones.