Trading level definition
Trading level
Trading levels are determined by a broker to ensure traders only enter specific markets and employ strategies that are on a par with their experience level. When you create a brokerage account, a broker will perform a risk assessment and determine your trading level. The broker will consider factors such as your available capital, occupation, age, and trading experience.
Trading levels can also refer to support and resistance levels, which are key price points in technical analysis.
Support and resistance levels explained
Support and resistance levels are two of the most common attributes in technical analysis. Traders use these terms in reference to price levels on charts to establish bounded lines defining price action on chart patterns. The support level represents where a downtrend repeatedly reverses, and the resistance level represents where an uptrend repeatedly reverses.
Support and resistance levels can be plotted horizontally or at an angle, so long as the levels established display patterns of preventing price movement beyond either line. Of course, the price will eventually crossover either the support or resistance level. This is called the breakout and usually ends whatever pattern traders established with the support and resistance levels.