Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Resistance level definition

A resistance level is a key tool in technical analysis, indicating when an asset has reached a price level that market participants are unwilling to surpass.

Resistance levels are often used in conjunction with support levels, or the point at which traders are unwilling to let an asset’s price drop much lower. Traders will often identify areas of support and resistance in order to make decisions on trades, including when to place stop-losses and take-profits.

If an asset does break through its resistance level, then some traders believe it will carry on rising in price, or ‘rally’, until a new resistance level is found.

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