#DayTradingStrategy What is a support level?

When using technical analysis to support your trading decisions, looking at a chart over an extended period will likely show some support levels – areas where prices are usually supported. These support levels provide a 'floor' for asset prices – whenever an asset falls to the support level, there’s a wall of willing buyers to purchase because they think the price presents good relative value.

What is a resistance level?

A resistance level is essentially the opposite of a support level. On a chart, you can often find resistance levels as areas where prices usually stop (or are resisted) and don't go any higher.

There’s an element of 'positive feedback' when it comes to support and resistance. To manage their risk, many traders will have stop and limit orders in place at the support and resistance levels, depending on the direction of their position. This means that both levels could remain in place for some time.