$W /USDT

In the world of financial trading, the concepts of "support" and "resistance" are essential tools for analyzing price movements. Support refers to a price level where a downward trend tends to pause due to increased demand. It’s where buyers typically step in, preventing further declines. Once a stock or asset hits this level, traders anticipate a bounce, as the asset has historically struggled to fall below it.

Resistance, on the other hand, is the opposite: a level where the price tends to pause or reverse due to selling pressure. It’s where an upward trend tends to stall as more traders begin selling, thinking the asset may have peaked temporarily.

Both support and resistance act as psychological barriers. Traders often place buy orders around support and sell orders around resistance. Once these levels are broken, it can signal a continuation or reversal in the market trend, leading to new trading opportunities. Understanding these points helps traders make better decisions about entering or exiting positions, providing a foundation for technical analysis in the financial markets.

By mastering the identification of support and resistance, traders can enhance their ability to predict market movements and manage risks effectively.

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