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Spot and Resistance in Trading

Spot price refers to the current market price at which an asset can be bought or sold for immediate delivery. In trading, the spot price is the real-time value of an asset like a stock, commodity, or currency. It reflects the balance between supply and demand at a given moment and can fluctuate rapidly based on market conditions. Traders use the spot price to make quick decisions, especially in volatile markets.

Resistance, on the other hand, is a concept used in technical analysis. It refers to a price level where an asset struggles to move beyond because sellers outnumber buyers. Resistance levels are seen as psychological barriers in trading, where traders anticipate that prices will stop rising and may start to fall. Identifying resistance is crucial because it helps traders decide when to sell or short an asset, avoiding potential losses.

Combining spot price analysis with resistance levels allows traders to better time their entries and exits in the market. When the spot price approaches a known resistance level, experienced traders often prepare for a potential reversal or consolidation, making it a vital strategy in risk management and market prediction.

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