Hello! You know, I’ve noticed that many beginners get confused with terms like resistance, support, order blocks, gaps. But in reality, they are just different names for the same phenomenon — liquidity. And today, let’s figure out what’s really behind this word and how to spot it on a chart.

Liquidity in trading is essentially the open positions of traders. When a market participant buys something or opens a long position, or vice versa, sells and opens a short — they create a certain price zone with liquidity. Here’s an important point: not every price zone on the chart contains liquidity. If the price range is no longer relevant and the price has long since broken through it, there’s no more liquidity there. Therefore, it makes sense to analyze only recent sections of the chart where the price has not yet passed through and where traders’ positions are truly accumulating.

The price constantly moves between clusters of liquidity. This happens because market reactions only occur where liquidity still exists. Why? Because liquidity is essentially a balance between market participants. In a certain zone, most traders have opened positions, and depending on the trend, this zone becomes either support or resistance.

Let’s take support. The price once traded at a certain level, then moved above it. When it touches this level again, it finds support. Why? Because the balance shifts — the participants who previously opened positions will return to the game.

Resistance works on the same principle, but in the opposite direction.

But there’s one more point. On the chart, there are areas where liquidity no longer exists. The price can reverse not because new participants appear, but because the old ones are no longer there. Usually, these are points where traders place stop-loss orders. When the price hits them, participants are forced to exit their positions, the balance sharply changes, and the price moves in the opposite direction.

So, all these terms — resistance, support, order blocks, gaps, imbalances — are just manifestations of liquidity and its absence. The main thing to understand in trading is where liquidity still exists and where it’s already gone. That’s the key to understanding price movement.