Zone Of Resistance

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Dictionary Says

Definition of 'Zone Of Resistance'

A price zone in which a stock finds resistance and begins to trade downward. In technical analysis, that support occurs not at a finite point, but in a zone. The "density" of the zone of resistance (how far up the price can move through it), depends on the volume of trading as the price approaches and enters the zone. The higher the volume of trading in the zone of resistance, the lower the point at which the actual resistance will most likely occur.
Investopedia Says

Investopedia explains 'Zone Of Resistance'

As the price of a security climbs toward a zone of resistance, it is a test: how far the price moves down through the zone will be an important indicator for future attempts to pass through it.

It is important to note that even though higher volume can lower the actual resistance point within the zone, the chance of the resistance zone being wiped out is also higher. When trying to pick the top of a retracement, it is imperative that stop-loss orders be used.
Search results for

'Zone Of Resistance'

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    http://www.investopedia.com/articles/trading/03/082003.asp
    ... By contrast, once your position is entering your zone of resistance, you would
    be well served to tighten your stops as much as is practical. ...

  • Capitalize On False Breakouts In The Danger Zone

    http://www.investopedia.com/articles/trading/10/false-breakout-danger-zone.asp
    ... When a security enters the danger zone, watch for signs of weakness. ... For more
    information, check out Support and Resistance Zones - Part 1 ...

  • Forex: The Memory Of Price Strategy

    http://www.investopedia.com/articles/forex/08/memory-price.asp
    ... our double-top example, we measure the amplitude of the retrace in the double top
    and then add that value to the swing high to create our zone of resistance. ...

  • Pivot Strategies: A Handy Tool For Forex Traders

    http://www.investopedia.com/articles/forex/05/FXpivots.asp
    ... Another strategy traders can use is to look for prices to obey the pivot level,
    therefore validating the level as a solid support or resistance zone. ...

  • How To Place Orders With A Forex Broker

    http://www.investopedia.com/articles/forex/07/forexorders.asp
    ... opinion, you can place a stop-buy order a few pips above the resistance level so ...
    may move your stop-sell order from the loss to the profit zone to safeguard ...

  • How To Use Gann Indicators

    http://www.investopedia.com/articles/trading/08/gann-indicator.asp
    ... price. These are called price clusters. The more angles clustering in a
    zone, the more important the support or resistance. (For ...

  • How To Build A Trading Indicator

    http://www.investopedia.com/articles/trading/04/120804.asp
    ... (For more basics, check out Support & Resistance Basics.) For example, when using
    the breadth ... When the line is in the median zone, there is little momentum. ...

  • 3 Technical Tools To Improve Your Trading

    http://www.investopedia.com/articles/trading/09/aroon-fibonacci-volume.asp
    ... for a move above or below zero (the no-trend, or neutral zone) to determine ... price
    where the stock has stopped falling in the past) and resistance levels (the ...

  • Introduction To Technical Analysis Price Patterns

    http://www.investopedia.com/articles/technical/112601.asp
    ... trendlines connect at least two of the highs and indicate resistance levels above ...
    price pattern and whether price breaks above or below the continuation zone. ...

  • November 25, 2011 Market Summary

    http://stocks.investopedia.com/stock-analysis/cotd/DIA20111125.aspx
    ... is now quite oversold and is pressing into the prior congestion zone formed during ...
    $117 area remains important, as it will likely now act as resistance again. ...

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