$PENDLE /USDT
Spot and Resistance in Trading: Key Concepts
In trading, understanding spot price and resistance levels is crucial for making informed decisions. The spot price refers to the current market price at which an asset, such as a stock, commodity, or currency, can be bought or sold immediately. It reflects the real-time supply and demand dynamics and acts as a baseline for traders to enter or exit positions.
On the other hand, resistance is a price level where an asset faces pressure to move higher, as many traders opt to sell at that point. Itâs considered a psychological barrier where the market struggles to rise beyond due to the increased selling activity. Identifying resistance levels is essential for traders to anticipate potential price reversals or breakouts. When the price breaks through resistance, it often signals a bullish market, and new highs may follow.
Successful traders monitor both spot prices and resistance levels to refine their strategies. Spot prices help determine the current market value, while resistance levels guide traders on when to sell, buy, or adjust their positions. Mastering these concepts enables more accurate market predictions and improves overall trading outcomes.
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