Resistance is the market's memory of where it was expensive before. In the zone, sell orders accumulate: someone takes profit, someone closes a losing position at breakeven, someone opens a sell position. The combined effect is that growth slows down.
Like support, resistance is marked as an area. A line drawn through a single peak is usually not useful; meaningful zones appear where price approached the area several times and retreated each time. Candle density also matters: where the market traded for an extended period, order concentration is usually greater than around one isolated spike.
A resistance breakout is one of the few events that is often followed by a rapid movement: there are few sellers left above the level, and the price skips through the empty zone. But this is exactly where false breakouts are caught. The price goes beyond the level, triggers the stop orders of those who sold from it, and returns to the range. Therefore, a breakout is usually awaited to be confirmed: a candle closing beyond the level, an increase in volume, and holding during a retest.
After a confident breakout, resistance changes its role and begins to act as support. A return to it from above provides a clear entry point with a tight stop - one of the most commonly used techniques in technical analysis.
