Importance of previous days high/low

[blash]

no matter which instrument I look at, there is frequently high volume/activity or reaction to a recent days high/low.

Can anyone explain the why these areas are so important?


cheers

 

[oatman]

It can be the nearest target on the following trading day. Support/resistance/breakout, starts here.
Technicians lurv a new hi or lo.

 

[FTSE Beater]

Hi Blash

It's also an important level for mechanical systems, as the majority of system trades are based on the hgh / low / close values which accounts for the high volume around those levels.

It is also the place where stop orders are placed so market makers try to fill those orders, again increasing volume

HTH