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Spot Price vs. Resistance in Trading

In trading, the spot price refers to the current price at which an asset, such as a stock, commodity, or currency, can be bought or sold for immediate delivery. It reflects real-time market conditions and fluctuates based on supply and demand. Traders closely monitor the spot price as it provides the most accurate reflection of an asset's current value.

Resistance, on the other hand, is a key technical level where the price of an asset tends to encounter selling pressure, causing it to stall or reverse its upward movement. Resistance levels are often identified through historical price patterns, and they represent points where traders expect selling activity to increase, making it difficult for the asset to break through. If the price breaks above a resistance level, it can signal a potential upward trend.

In practice, traders use the relationship between spot price and resistance to make informed decisions. If the spot price approaches resistance, it could suggest caution, as the asset may struggle to move higher. Conversely, if the asset breaks above resistance, it may signal strong buying momentum and the potential for further gains.

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