3b
Resistances on the chart act absolutely the same way as supports, but in the opposite direction. When the price is increasing and starts hesitating at a certain level, we say that the price has found resistance. In the case of another price interaction with this same resistance area, we might expect another bounce from this level.
Same as with support levels,if the price breaks a resistance level, we expect a continuation of the rally .As such,resistance areas are used to set entry and exit points when trading – similar to suport
Let’s assume you are in a long trade in the GBP/USD,and the price is steadily increasing. The price action then meets a resistance level on the chart.
In this case, this resistance is a good exit point from the trade. You can exit the trade in anticipation of a minor or major reversal off the resistance zon
However, the price might go through this level,right? If this happens, you can then reopen your trade after the breakout for an attempt to catch a further price increase. 2 replies
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