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Understanding Spot and Resistance in Trading

In trading, two fundamental concepts are spot price and resistance levels. The spot price refers to the current market price at which an asset, such as a stock or commodity, can be bought or sold for immediate delivery. It fluctuates constantly due to market demand and supply. Traders use the spot price to gauge real-time value and make decisions about buying or selling assets.

On the other hand, resistance is a critical technical analysis concept. It represents a price level where an asset faces difficulty moving beyond, as sellers step in to prevent further increases. At resistance, selling pressure outweighs buying, causing the price to stall or reverse direction. Identifying these levels helps traders make informed decisions, such as selling an asset before it drops or waiting to buy after it breaks through resistance.

By understanding both concepts, traders can better navigate market dynamics. While the spot price indicates the real-time value of an asset, identifying resistance levels offers insight into potential price reversals or breakouts, guiding strategic entry and exit points. Successful trading relies on analyzing these key indicators to minimize risk and maximize profit.

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