A level where the sellers wait:price climbs to it, then meets the gate.
A price level where selling pressure tends to prevent further upward movement.
Resistance levels are identified through previous price highs, trendlines, and technical indicators.
In plain words
Resistance is a price area where rises have stopped before, because sellers there outweighed buyers. Chart readers mark it from earlier highs and expect that sellers may appear there again.
See it move
Sellers outweighs Buyers
Why it matters
Resistance levels are widely watched, so orders tend to gather around them: take profit orders from holders, and stop orders from those waiting for a break higher. That clustering can make the price react at the level, in either direction.
Worked example
An example only. The figures are round and invented for the arithmetic: they are not market prices.
A pair has turned down from 1.1200 three times in a month and now trades at 1.1150.
- 1Distance to the marked level1.1200 − 1.1150 = 50 pips.
- 2If the price turns down again at 1.1200, the level has held a fourth time.
- 3If the price moves above 1.1200 and stays there, the level is described as broken, and some chart readers then treat it as possible support.
The level records where selling was found before; it does not say which of the two outcomes comes next.
A common mistake
Resistance is not a ceiling. It is an area where selling appeared in the past, and every level that has ever been broken was resistance until then.
Check yourself
Learn more
- Academy lessonCandlestick patternsThe anatomy of a candle and the single, two- and three-candle patterns most often named in price-action analysis, with their caveats.
- Academy lessonSupport and resistanceWhat support and resistance are, how horizontal levels, trendlines and moving averages are drawn, and what breakouts and false breakouts look like.
- ExplainerThe golden ratio in technical analysis: how Fibonacci tools are builtRetracements, extensions, fans and time zones all come from one number, 1.618. This is how each tool is constructed, how traders read it, and where its limits lie.
- GuideJapanese candlestick patterns: a visual vocabularyDojis, hammers, engulfing bars and stars: what each pattern looks like, what it is taken to say about buyers and sellers, and why context matters more than the shape.
Educational information, not investment advice or a recommendation to trade.