You're on the right track, but allow me to make a few modifications.Originally Posted by GirlPower
How about a really simple statement of what the relationships are between these aspects?
Support and Resistance are points where respectively, Demand overshadows Supply and Supply overwhelms Demand. That would assume no other direct or indirect manipulation of the price - just straightforward buyers & sellers.
High, lows and particularly round number points are likely SR points (especially decade points).
Recent High/Low points also act as SR points. Current day, previous day, weekly, monthly, 52wk Highs & Lows.
Where the bunny hits the mincer is when we look at the relationship between Price & Volume.
DBP, you're an expert on this, why don't you give us your take on it?
S/R are not points where demand overwhelms supply or vice-versa. They are rather points or levels or zones at which the movement of price might be affected due to the fact that price was affected there earlier by demand overwhelming supply or vice-versa. In other words, a swing high occurs because supply overwhelms demand, at least for the time being, but one cannot assume that a swing high is going to act as resistance simply because it's a swing high. It must also act as resistance in order to be resistance. If it doesn't, then it isn't. Again, this is not to say that highs, lows, round numbers are not potential S/R. But they are not actual S/R until they actually provide S or R.
As for the expert part, I'm just looking for the truth, and I've learned that the truth is to be found in price. Understanding the behavior of price is the real trick.