$LAZIO /USDT

In trading, support and resistance are key technical analysis concepts that help traders identify potential price levels for entry or exit. Support refers to a price level where a downtrend is expected to pause due to a concentration of demand. As the price approaches this level, traders anticipate that buyers will step in, preventing further decline. If the price breaks below support, it signals weakness and potential for further decline.

On the other hand, resistance represents a price level where an uptrend may stall due to selling pressure. When the price nears resistance, sellers are likely to enter the market, limiting upward movement. A break above resistance indicates strength and the potential for further gains.

Spotting these levels is essential because they act as psychological barriers in the market. Traders often place their buy orders near support and sell orders near resistance. Additionally, when these levels are broken, they can switch roles, with former support becoming resistance and vice versa.

Mastering support and resistance levels helps traders make more informed decisions and manage risks effectively. Tools like trendlines, moving averages, and Fibonacci retracements are commonly used to identify these critical levels.

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