Hunt for an answer & explore

Best Trading software

Why do stock brokers not give a support resistance price but a support resistance level?

These are very important notions in stock trading (offline or online trading).

A support level refers to a level where the price of a stock is stable till its price falls. The level essentially provides a kind of support to the stock price. The price of a stock is more likely to reduce at this point than increase.

So, once the price of the stock starts falling, it continues to turn down till it reaches the next support level.

A Resistance level is opposite of support level. It is the level where the price remains stable as it rises.

The level provides a kind of resistance to the stock price. The price of the stock is more probable to rise at this point than decrease.

Once the price of the stock starts rising, it continues to do so till it has reached the next resistance level.

Support and resistance have an impact on the share market trends. If an existing trend line reaches a resistance level, it will go through a vibrant shift.

If a trend line is tested more often, it becomes more valid.

Why support and resistance levels are only provided?

In most instances it if difficult to provide an exact price of a stock where it will find support or resistance, it is easier to offer a level as the market is always subjected to unpredictability.

For instance, when most people choose to trade, they usually have a number they would like to trade at.

The trader might buy the stock when it hits $10 whereas; the current price of the stock will be $13. There will be many other traders who are in the offing for the same price drop.

Therefore, for this reason when the price drops to $10, the volume of the shares increases and it achieves a support level of $10.

Your Comment here
Email Postby Comments