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Understanding Spot Price and Resistance in Trading

In trading, the spot price refers to the current market price of an asset. It’s the price at which the asset can be bought or sold for immediate delivery. The spot price is driven by supply and demand factors, and it fluctuates continuously during market hours. Traders use the spot price to make real-time decisions, and it's a key factor in determining future contracts, options, and other derivatives.

On the other hand, resistance is a price level at which an asset struggles to move above. When the price reaches this level, there tends to be an increase in selling pressure, causing the price to stall or reverse direction. Resistance is a concept used in technical analysis and helps traders identify potential price ceilings. If a price breaks through a resistance level, it may continue to rise, as the barrier has been surpassed.

Combining these concepts, traders often watch for the spot price approaching resistance levels to make strategic decisions. A failure to break through resistance may signal a selling opportunity, while a breakthrough could indicate a strong buy signal. Understanding these principles is essential for successful trading strategies.

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