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Definition

Support and Resistance

Common labels for areas where price previously reacted. In this framework, the level itself has no power; the current interaction between aggression and liquidity determines the outcome.

Full Explanation
Support and resistance are useful visual shorthand, but the words can hide a mechanical assumption. A prior low may be called support because buy-side liquidity previously absorbed sell aggression there. A prior high may be called resistance because sell-side liquidity previously absorbed buy aggression. The reaction was real. The permanent property assigned to the level is not.

When price returns, the historical line cannot absorb anything. Only orders can. The liquidity that existed before may still be present, may have been replaced, may have been withdrawn, or may be too small for the aggression arriving now.

Trade the Mechanics still pays attention to obvious levels because they often concentrate orders and produce informative interactions. The difference is in how they are used. Rather than predicting a bounce because 'support is strong,' watch whether sell aggression is actually being absorbed. Rather than predicting rejection at resistance, watch whether buy aggression continues to relocate through the area.