Resistance
A price area where selling has repeatedly been strong enough to stop an advance.
Also called: resistance level · ceiling · supply
Written by Javier Sánchez Ros
In plain language
Resistance is the mirror of support: a zone where supply has consistently overwhelmed demand and capped the move.
It often forms where trapped buyers wait. People who bought a previous high and sat through a decline frequently sell as soon as they get back to break-even, creating fresh supply.
Once resistance is broken and price holds above it, the level tends to flip and act as support on a retest.
Worked through
A target at resistance versus a target at a round number
- Entry
- $68.20, stop $66.90
- Resistance
- $72.40
- Target at resistance
- 1:3.2
- Target at $75.00
- 1:5.2 — on paper
The $75 target has the better ratio and the worse odds. $72.40 is where sellers have already turned this instrument back; $75 is a number that looks tidy. Setting the target beyond known resistance does not make the move more likely to get there — it makes a trade that reaches $72.30 and reverses finish as a loss instead of a win.
This is the honest way to use a level. Resistance tells you where the upside realistically runs out, so it supplies the target, and the target plus the stop supplies the ratio. Read in that order the ratio is a finding.
Read in the other order it is a fiction. Deciding the trade needs 1:5 and placing the target wherever produces 1:5 will always produce 1:5, and a hit rate nobody measured.
The nuance worth keeping: a level that has held several times is stronger evidence than one that has held once, and old resistance that has been broken often becomes support. Both change where the target belongs, neither changes the principle that it belongs where price is plausibly going.
Seen on a chart
Why it matters
Resistance is where a long trade’s upside realistically runs out, which makes it a far better basis for a take profit than a round number.
Common mistakes
- Setting a target just beyond heavy resistance instead of just before it.
- Reading every touch as equally significant regardless of volume or context.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
A price area where buying has repeatedly been strong enough to stop a decline.
When price moves decisively beyond an established support or resistance level.
A predefined price where a winning trade is closed automatically.
A market bounded between a clear high and low, with no directional trend.
When price returns to a broken level to confirm it now holds from the other side.