Understanding Supports and Resistances in Stock Trading
Supports and resistances are two of the most important concepts in the technical analysis of stock markets. They refer to price levels at which the market either finds strong support or encounters strong resistance and in turn, are used to predict potential price movements. These two terms are so important in the stock market because they can provide investors with valuable insights on how to buy and sell stocks.
Starting with the definition of supports
and resistances, they can be defined as price points that the market either
finds strong support or encounters strong resistance. When the price reaches a
support level, it is said to be “supported” and when it reaches a resistance
level, it is said to be “resisted”. This means that the price is likely to find
support or resistance at certain levels and as a result, investors should watch
for these levels when analyzing the price of a stock.
Read More: Understanding Supports and Resistances in Stock Trading
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