Support and Resistance

Support and Resistance levels can help you to recognize when an asset’s price movement is more likely to fall into a downward trend or increase into an upward trend. Previous highs and lows in the price make for natural beginning and end points for long-term trends. Levels show the direction in which the price of an asset is going and therefore indicate whether it is better to open or close a position on a particular asset. 

On the other hand, resistance level refers to the price threshold that security seems historically unable to overcome. Position traders will use long-term resistance, for example, to decide when to close a position, also traders could buy at historic support levels if they believe a long-term upward trend will begin.