What is resistance in trading?
In one line: Resistance is a price area where a rising market has stopped and turned back down before, because sellers stepped in there.
A simple example
On a 4-hour chart of GBP/USD, price climbs to 1.2700 and drops. A week later it rises to 1.2695 and drops again. Then it reaches 1.2710 and falls a third time.
The area from about 1.2690 to 1.2715 is resistance. Sellers have shown up there three times. When price comes back up to it, many traders expect sellers again.
Why it matters
Resistance is useful in two ways.
- As a target. If you're in a buy, the next ceiling above you is a sensible place for your Take profit. Aim just before it, since price often turns before it reaches the exact top.
- As a warning. Buying right under resistance means there's little room before sellers may step in. The risk-reward calculator quickly shows whether there's enough room above you.
When resistance breaks
If a candle body closes clearly above resistance, the ceiling has given way. That's a Breakout. Often, price later pulls back to the old ceiling, and it acts as a floor, a new Support. That retest is where many traders look for a clearer entry.
If only a Wick pokes above and price closes back below, the ceiling held. That's a Fakeout, not a breakout. More in breakout vs fakeout.
A common mistake
Buying the first poke above resistance. The spike looks exciting, but until a candle closes above the zone, nothing has changed. Many traders buy the spike and then watch it fall back under the ceiling.
Another mistake is ignoring the bigger chart. A ceiling on the daily chart matters far more than one on a 5-minute chart. Mark the big ones first, then zoom in. See support and resistance explained simply.
Questions
How many touches make resistance valid?
Two clear turns make it worth marking. Three or more make it more visible to other traders.
Can resistance become support?
Yes, often. After price closes above a ceiling, that same area can act as a floor when price comes back to it.
Is a round number like $100 resistance?
It can be, because many people place orders at round numbers. Still, trust where price actually turned more than the number itself.
Want the next step? We'll walk you through it.
Four free lessons by email, one every few days — each with a 10-minute exercise on a real chart.
Send Me the Free Lessons 4 short emails · No spam · Unsubscribe anytimeOr see the whole method, step by step:
See What’s Inside the Course Try everything free first. Decide when you're ready. · Open the free chart tool (works in the TradingView phone app)One chart idea a day, in plain English. Follow along: