KoA: Re-Reckoning does not have a damage resistance (DR) cap. If you bring your damage resistance high enough, you can become completely invulnerable to any and all damage in combat. You can make that happen with relative ease, relatively early on, and without making use of any glitches or exploits.

Obviously becoming invulnerable will completely break the game, so don't follow this guide if you are not okay with that.

You can get damage resistance bonuses from a number of different sources: items/item components, epic gems, abilities, twists of fate and destinies. Here's a partial list:

• Greater Everlasting String components, 7 % DR (for sale in Rathir)
  
• Improved Everlasting Lining components, 5 % DR (for sale in Ysa)
  
• Epic Gem of the Subjucator, 10 % DR (to create, use 2 pristine physical shards)
  
• Ballads Signet Ring, 5 % DR (loot from the first quest in the Ballads quest line)
  
• Medallion Everlasting, 13 % DR (for sale in Ysa)
  
• Boundless Talisman of Haven, 20 % DR (for sale in Mel Aglir and also Rathir, but much cheaper in Mel Aglir)
  
• the Sorcery ability Sphere of Protection, 12 % DR at level 6 and can be boosted further
  
• Jack of All Trades Destinies, 12 % at Tier 6
  
• the Undisputed Champion Twist of Fate, 5 % DR, from finishing the Arena quest line.

By my count, you can fit 3 Improved Everlasting Lining components and 3 Greater Everlasting String components into a mixed set of crafted armor, which adds up to 46 % DR with the epic gem. In order to craft this set of armor, your blacksmithing skill needs to be at tier 7 and your Sagecrafting skill at tier 8 (at least temporarily). When you add everything else from the list above, your DR will reach 113 %. Going beyond 100 % doesn't do anything (except counteracts debuffs), so you have some room for customization.

You can get everything on the list well before taking the trip to Klurikon. The Talisman is by far the most expensive item, and also the most demanding to use: if you have a Jack of All Trades Destiny active, you'll need 27 points in Sorcery abilities before you can use it. Some of the items are acquired from Ysa, which you can't enter from the start. Note, however, that you don't need to follow the main quest line in the usual order: just head directly to Caer Nyralim and Nyralim will give you the quest to kill Gnarsh. You'll need to fight some trolls and Tuatha, but you'll have a companion (either Alyn Shir or the fae Sola) to help you. The fighting isn't that hard, though I would wait until you have an Azurite weapon or something similar.

There are other options too:

• Later on in Klurikon, you'll gain access the Alabastra Lorestone bonus, which adds 4 % DR
  
• Finishing the main quest will gain you a Twist of Fate that adds 5 % DR
  
• Many players have made use of Myfa Rhonwen, the diplomat who will offer her services in the Legend of Dead Kel DLC. She can be sent on diplomatic missions and can bring back high level crafting components, including high tier Everlasting components (H/t to Ryan in the comments for bringing this up). The components she brings back are leveled and there's some conflicting information online about what level you should be aiming for, but as far as I can tell she starts bringing back flawless components at level 30+, then switches to Mitharan (which don't have everlasting components) at level 35+. Scaling is no longer locked to the level when you started the DLC like it used to be.
  
• For items that are for sale in the base game, the trader in Helmgard Keep offers Timeless Robes of Storm's Rage and Timeless Handwraps of the Wave, which are both hexweave based mage armor, both offer 16 % DR
  
• You may acquire more powerful components from salvaging items: e.g. if you salvage a piece of armor that had the Greater Everlasting String and Improved Everlasting Lining components, you may gain a Greater Everlasting Lining component. Everlasting trim components exist in the game and can be acquired by salvaging, though I haven't seen them offered by any trader.
  
• The Sphere of Protection ability can be boosted by finishing the Scholia Arcana quest line or with items that improve your Sorcery abilities. Each additional level adds 2 % DR.

Once you have 100 % DR, the only things that can still hurt you are curses and diseases, mainly because some of them give you a DR debuff.

• The Corruptor's Curse gives you a -50 % DR penalty
  
• Curse of Withering gives you a -25 % DR penalty against fae
  
• There is at least one quest that involves getting cursed: during the side quest Kidnapped, which takes place in Alserund, you'll be cursed with Trial of Commencement. This will add a -50 % DR penalty, which will be removed once that portion of the quest is finished.
  
• As for diseases, you can get infected with Blood Plague while fighting Boggart Plaguebearers. Blood Plague gives you a 30% DR debuff.
  
• Sewer Rot can damage you if you come into contact with some of the pools that can be found in dungeons. Instead of debuffing, Sewer Rot gives you - 5 / sec negative health regeneration, thus bypassing DR. The effect isn't powerful enough to kill you (unless you intentionally stand around in a pool), but you may want to keep some means of healing available anyways.

You can avoid both curses and diseases fairly easily. Apart from scripted curses during quests, the main way of getting cursed are failed dispelling attempts. You can simply leave warded containers alone unless you can open them safely (you don't need the loot anyways). If you do fail a dispelling attempt and get cursed, you'll need a healer.

Disease-bearing critters are not very common and you can get rid of diseases by drinking a purification potion or visiting a healer. Sewer Rot will only affect you when you are in contact with the pool and doesn't need to be removed afterwards.

• First, buid up a character with some slight durability and skill in battle. I tend to start with a greatsword and Might based abilities. Also gather some gold (e.g. finish Nanne Hanri's quest Recipe for Trouble, which gives you much better prizes with her afterwards. Then sell her Dirge's Dancing Shoes, which can be found near Didenhil).
  
• Start building up your Sphere of Protection ability and your Jack of All Trades destiny
  
• Head over to Rathir. Most of the enemies will be of a much higher level than you at this point, so it's easiest to just run past them. In earlier versions of the game enemy level was locked when you first entered an area, but this is supposed to have been changed in Re-Reckoning, so messing up enemy levelling is no longer an issue.
  
• Once in Rathir, buy the Everlasting String components and whatever else useful you can afford, like Azurite weapon components and Robust rivets. Upgrade your gear.
  
• Gain access to Ysa
  
• Buy the medallion and Everlasting Lining components. Upgrade your gear.
  
• Gain experience until you can create epic gems. Upgrade your gear.
  
• Get the Ballads Signet Ring
  
• Finish the Arena quest line
  
• Build up experience until you can use the talisman.

Once you have 100 % DR, it doesn't really matter much what you do, since you're unbeatable in any case. However, if you wish, having 100+ % DR means you can completely ignore all other defensive effects while crafting and focus on your damage output instead. To start with, the trader at the Arena sells some useful components, and the trader in Camp Moondown in Klurikon some slightly better ones. Armor gems will be useless: instead, you can use utility gems, which have some damage improving effects. If you rebuild your gear and abilities, you can increase your DPS a great deal and therefore also make it faster to finish quests and gain levels.

After that, enjoy being invincible!

The Fatesworn DLC adds some damage resistance related items and mechanisms:

• you'll be tripping over overpowered loot, including armor pieces and accessories that improve DR by up to 28 %.
  
• I didn't come across any new, higher tier Everlasting components, or any new merchants that would sell Everlasting components.
  
• there is an enemy type called Chaos Critters that will blow up in your face and apply the Chaos Rot debuff, which decreases DR by 10 %. It also stacks. Chaos critters tend to show up in groups of 3-5.
  
• during the final quest, there is a section where you have to temporarily switch to a different armor set that only provides 13 % DR, though it's a fairly short section. Accessories will be useful here.
  
• when you reach the end boss, you can switch back to your custom armor if you want. The end boss uses a different kind of debuff that also adds -10 DR and can stack many times, so going beyond 100 % should be useful.
  
• All the mechanics, items etc in the base game and other DLCs are unchanged.