Hi Rick, When you talk about 'liquidity' zones, do you mind...

Hi Rick,

When you talk about 'liquidity' zones, do you mind expanding on that for a laymen?

Price moves based on supply and demand (right?), and liquidity is just a measure of either volume or at least how much supply or demand is present in the market - is your thesis here that there is going to be higher volume traded in that zone? Or simply higher level of supply seen if that support breaks? Or am I missing the point

To me, the base of your zone is simply an old support, and may be tested if the top of your zone (current support?) is broken.

So I'm not quite following - what makes the space in between the two supports more liquid than any other space? In my experience, those two support areas will attract perhaps higher liquidity, but the void in between would generally not? If anything you may just see more supply come in as demand dries up and the majority of the market is banking on that next support being tested? But that's only if support breaks, so to me it's nothing to do with the 'zone', but it's all to do (not surprisingly) with the support levels being respected or broken.

I note your comments about them just being speed bumps, and Sharks discussion on timeframes... than referring to the zone as the speedbump - are you just over complicating resistance levels? i.e. between entry -> target there will be X lines of resistance, and additional lines will form on that journey (more on the lower timeframes, but less impact on the higher timeframes) - so shouldn't we really be saying forget the zone, just acknowledge that if your target sits beyond a known resistance, just be patient as it becomes more 'liquid' around these areas before continue the moves?

Maybe it's just semantics, or maybe I'm way off lol.