Resistance Level

When charting an asset’s price, the resistance level is a price level at which the market seems reluctant or incapable of going beyond. In other words, it is a level at which selling is likely to occur. Traders often use recent highs to plot resistance lines on the charts in question as they are often good indicators of imminent trend reversal. The more times an asset’s price fails to break through a resistance level the more that resistance level is reinforced.