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Definition of Support and Resistance S/R

Definition of 'Support and Resistance S/R'

Support is either a price or a price area at which the market struggles to trade below. Because the market cannot move below this level it is referred to as Support. Traders look for areas of support in the market to place Buy orders to go Long. They also use the Support area to place a Target for a Short position.

Resistance is either a price or a price area at which the market struggles to trade above. Because the market cannot move above this level it is referred to as Resistance. Traders look for areas of Resistance in the market to place Sell orders to go Short. They also use the Resistance area to place a Target for Long positions.

Pivot Points (also called Floor Pivots) are classic calculations used to determine areas of support and resistance during the trading day. These areas are usually calculated based off the High, Low and Closing prices of the previous trading session.
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