Support Definition - Glossary

Support is a price level where buying interest is strong enough to prevent the price from falling further.

Support is a critical concept in trading. It refers to a price level where a security tends to stop falling and may even bounce back. This happens because traders perceive it as a good buying opportunity, leading to increased demand. Support levels can be identified using past price data or technical analysis tools. When a price approaches a support level, it might indicate a potential reversal or consolidation. Understanding support helps traders make informed decisions about entering or exiting trades, managing risk, and predicting future price movements.