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Spot and Resistance in Trading

In trading, understanding spot prices and resistance levels is crucial for making informed decisions. The spot price is the current market price at which an asset is bought or sold for immediate settlement. It's the real-time value of the asset, such as a stock, currency, or commodity, and fluctuates based on supply and demand.

Resistance, on the other hand, is a technical analysis concept referring to a price level where an asset faces selling pressure. This level is often marked by repeated failed attempts to break through a certain price, indicating that many traders are choosing to sell at that price point. It creates a psychological barrier for the price, as sellers outnumber buyers.

Spot prices are dynamic, reflecting real-time market activity, while resistance levels are typically identified using past price trends and technical indicators. Traders often use these concepts together to predict price movements: if the spot price approaches resistance, it may signal an upcoming reversal, or, if broken, it could indicate a price breakout and continuation of a trend.

By recognizing resistance levels and monitoring spot prices, traders can better plan entry and exit strategies, minimizing risks and maximizing profits.

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