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Liquidity

Why price reacts to s&d zones before breaking themWhy price reacts to s&d zones before breaking them. We tend to see a reaction for one simple reason; - BFI's need liquidity to accumulate a sizable position. So, how would a reaction provide them with this liquidity? - Retail traders will enter aggressively at these s&d zones expecting price to move away from them. Now, BFI's will use all this liquidity to accumulate a sizable position, targeting the next pool of liquidity which is retail's stop-losses on the opposite side of the zone.
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by doksfx
📚 Inducement: What Is It ⁉️Inducement is a trap before an area of supply or demand. Price will usually lure impatient buyers/sellers into the market before the zone is met to create liquidity. Once the impatient traders get trap [ped and stopped out, the true move begins. This just goes to show the importance of sitting on your hands! Traders, if you have your own opinion about this idea, write in the comments section, I always reply. 💬 🚨 RISK DISCLAIMER: Trading Crypto, Futures, Forex, CFDs, and Stocks involves a risk of loss. Please consider carefully if such trading is appropriate for you. Past performance is not indicative of future results. Always limit your leverage and use a tight stop loss. -------------------------------------------------------------------------------------------------------- Please like, subscribe, and share this idea with others! ⬇️ --------------------------------------------------------------------------------------------------------
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by AlkalineFX
31
Only Strategy You Ever Need! .. Liquidity Build&SweepHello everyone! Liquidity is the main force that moves all markets, understand it well, and everything becomes clearer... Liquidity, simply, is "where orders are resting". Sometimes it is clear, other times not. So you have to look really well into where we have relative equal highs (sell-side) or lows (buy-side).Does that mean to jump into buying below relative equal lows/selling above relative equal highs right away? Of course no. As explained above, most of the time we have an indication as to whether the Market is responding as it shouldmd or not. Like a rejection or multiple rejections or a candle pattern or whatever.. you should see and indiction in price action, not indicators. Also pay attention to time frames. Equal highs/lows should not be treated the same way in small and big time frames... At least 15-min timeframe is recommended... Your comments are highly appreciated... Please don't forget to ▶️ FOLLOW & ▶️LIKE if you found my tutorial a help to you... Great content is to come yet.. hopefully.. Thanks Guys!
Education
by MST_Trader
2
Crypto NotesHi traders! I did not plan to make this post but as Crypto markets are currently falling I will share some of my Crypto notes that have helped me to navigate in Cryptoverse. Side note: This is not the only way how to trade Crypto markets. Sharing just some information. Eventually every trader have it's own methods and beliefs. Being early is a great advantage in Crypto If you want to discover good projects early that have high potential then some work is needed to put into research. Nowadays there are so many projects (not only BTC & ETH) and it may feel sometimes overwhelming. Good way is to focus on some specific sectors - this will help to set some boundaries. Of course these sectors (or new trends) can change as we are dealing with fastly moving technology. If you find something and are able to get in early then it means an entry with low price. When project is successful you will make X multiple gains (you can replace X with any number you like). But research is only one part of the work - trade management is also needed. Of course being early has its own risks - at the beginning there is a lot of uncertainty and not all projects are going to succeed. Trader will have greater earnings potential but also greater risk of failure (compared with mature projects). Everything is in balance. I personally feel quite comfortable being early - that's why I also like to invest into startups. I value high earnings potential more than risk of being wrong. Being early gives me some sort of price protection or margin of safety ( check concept 'Margin of Safety' from book "Intelligent Investor - Benjamin Graham" ). This will allow me to deal with volatile price swings more easily. I guess it's just like my personal trait. If you don't feel that way then it is perfectly fine. As I said earlier, you can be successful with different strategies. Just find out what style suits you best. Scale In & Scale Out As I have longer view with my Crypto holdings I like to scale in with my buying. For me good entry points are after selloffs - as long as I have a belief that general market structure has not changed. I have my core positions that I will plan to hold for years but I also have other positions that I am willing to sell. I try to scale out from those positions when market is rising to lock in some profit. Doing that will allow me to put some money aside and have gunpowder to buy more after selloffs or fund new early stage projects. This takes some practicing because sometimes market rises so nicely that trader feels like there is no point to sell until whole market is down ... It is hard to predict those events and that's why I prefer to scale out. I try to play the long-term game and I don't have to do all my buying or selling with one trade. Liquidity Planning Basically I will ride all the ups and downs (hold strategy) with my core positions but scale out (trading) from other positions. Then I have always some reserve to add more during selloffs or to fund new projects. I try to plan ahead how much reserve money I need and make myself available to as many opportunities as possible. For long time I underestimated Liquidity Planning's importance and that has caused me to sell many positions too early (or when conditions were not most favorable) - simply because I did not led my cash flows. I thought that I just 'flow' and find money when opportunities lie in front of me. Final thoughts about Crypto markets - as Crypto is going more mainstream every year and probably there are some new market participants who have never experienced this kind of selloff then just relax - this is not the first and not the last market selloff. Remember - usually when fear is greatest there are also some good opportunities. People tend to forget that and only focus on risks. If some mistakes were made during previous leg up then now is good time to learn and plan ahead. That's how we evolve as traders and humans :) Thank you and enjoy your trading :)
Education
by Laurentsius
4
Replaying Trade Setups - Liquidity Grab Reversal - Trading ToolsHaving the right Trading Tools as part of your Technical Analysis setup can give you the edge. When completing your Technical Analysis its good to know where high volume liquidity areas are. This script automatically shows you where these unrecovered zones are. This allows you as a trader to forecast Take Profits, closing your trade or when a reversal might occur. This video shows that once the high volume liquidity zone was recovered price reversed. This could have assisted your Technical Analysis if you where in a short to close your trade / Take Profits. This could have assisted your Technical Analysis to place a long once the liquidity had been recovered. Trade Safe.
Education
by Frien_dd-DisDev
15
How to Track Liquidity and Trade Them? | Sell_Side Buy_Side |Ever thought a price moves because it's on support level or below a resistance level? Or because your favourite indicators show a buy/sell signal and you want the price to see the same and move in you favourite direction? A Big No, dear. That simply won't happen... The main gyrator of the market is "Liquidity" What is liquidity? Liquidity, in very simple terms, is where stops are. And that's (mainly) below relative equal lows or above relative equal highs... So you're now maybe thinking, "well, that's why I get stopped out just before the price moves violently in my previous direction.." Exactly, that's it... Learn how to see where liquidity is resting and how to to become engaged in a good trade... That's exactly what I want you to do... And here is one lesson of many that I will post.. in addition to live calls when I see high-probability setups... I will turn your eyes to it... Ther are a lot more to come, so don't forget to ▶️ LIKE ▶️ FOLLOW to keep updated with everything I post.. Let me know in the comments what you wanna be the second lesson on.. Good Luck&Be Safe
Education
by MST_Trader
2
Elevate Your Trading | How to Track Liquidity and How to TradeEver thought a price moves because it's on support level or below a resistance level? Or because your favourite indicators show a buy/sell signal and you want the price to see the same and move in you favourite direction? A Big No, dear. That simply won't happen... The main gyrator of the market is "Liquidity" What is liquidity? Liquidity, in very simple terms, is where stops are. And that's (mainly) below relative equal lows or above relative equal highs... So you're now maybe thinking, "well, that's why I get stopped out just before the price moves violently in my previous direction.." Exactly, that's it... Learn how to see where liquidity is resting and how to to become engaged in a good trade... That's exactly what I want you to do... And here is one lesson of many that I will post.. in addition to live calls when I see high-probability setups... I will turn your eyes to it... Ther are a lot more to come, so don't forget to ▶️ LIKE ▶️ FOLLOW to keep updated with everything I post.. Let me know in the comments what you wanna be the second lesson on.. Good Luck&Be Safe
Education
by MST_Trader
1
Understanding News ManipulationIt is crucial to understand the price action prior to a high impact news event. Analysing the range to the left beforehand can help you determine what move is likely to come next. In this example, we saw the price was driven down by the bears to stop out buyers, only to reverse immediately to the upside moments after the news had been released. By studying and acquiring knowledge like this, you can predict market moves that are likely to come with fundamentals. Find the liquidity and trade it, or be the liquidity.
Education
by AlkalineFX
10
Learning Parallel Channel TrapsSometimes we can get so caught up in the fear of missing out on the breakout that we forget it could be a trap. It is always crucial to listen to your intuition when you see these easy setups because more often than not they are more complex than they seem. In this example, a breakout occurred and buyers put stops below the last structure, a few days later this structure got raided for liquidity. Once the liquidity was gathered we began to see the true move to the upside. Do you see this often in the markets?
Education
by AlkalineFX
2
Viewing Break of Market Structures as Broken ExpectationsBreak of expectations is a perspective from which I look at market moves a lot of the time. Broken expectations manifest in the form of broken structures. It's the same thing, but just another way of looking at such moves which makes the liquidity story a bit clearer thereby inducing more confidence in taking trades off these zones. Obvious trend continuation zones, when broken, catch many a trader offside. These make for high probability trade locations (for trades in the opposite direction).
Education
by the_MarketWhisperer
1
Understanding Equal High LiquidityThe concept around equal high liquidity comes from the understanding that stop losses hold above these points. In this example, price broke out of bullish structure and began to form bearish market conditions. This would of course attract sellers, especially at the double top point marked. The idea is simple, tackle the impulsive sellers before the trend continues. You can see that price began to lure sellers in from the double top but then came back to take them out before continuing with the true move. This type of move falls under all concepts of money distribution within liquidity and is definitely worth adding to your strategy.
Education
by AlkalineFX
⚡️ Understanding Breakout Traps ⚡️If we see a pattern form that retail likes to trade, It is highly likely that this pattern may get manipulated. The reason these common patterns get manipulated is because of liquidity forming. Banks want to make sure they can create enough liquidity for themselves to get positioned nicely in the market. They do this by driving the price up/down into stop loss areas. To avoid being caught out we need to sit on our hands, wait for the stop loss hunt to occur before we go-ahead with our initial position bias.
Education
by AlkalineFX
The Liquidity GrabI'm going to do my best here at explaining the basics around a liquidity grab (some times called a stop hunt), why it happens and how it works (ignore the chart I'm using, I'm not saying this is a manipulated move just showing you an example of how it works) I often refer to this in my playbook as an STL "Sweep The Legs" coupled with a picture of Johnny Lawrence from the karate kid lol First you need to understand that Big money plays a different game to retail. When you want to place a buy order at a specific price point, lets say your buying a thousands dollars worth of BTC @ $30,000, you can put an order in and boom it gets hit your filled and your ready to go to the moon. Now imagine some bigger traders who play with a lot more money than you, lets say there order is more like a billion dollars. Well in order for them to fill there position, there needs to be a large amount of selling at that level other wise they may only get a small piece filled...... theeeeeen of course the price moves away and your priced out of the market (imagine putting your $1000 order in, only getting $10 of it filled and then having the price moon....yeah it would suck) They do not want to chase candles or buy up the order book, thats just not good business, and if you have to do that in order to get your orders filled thats a good indication that there is already liquidity issues within this market and you may have a similar problem trying to cover of your position later on. So these players some times need to hunt down and find or even artificially create liquidity pools for them to take a big bite at like pigs at the trough. One of the easiest ways to do that is to look for the most obvious levels of support with in a trend of sideways channel and look at the buying thats happening on that level. If we dont get an instant recovery or bounce at that level it can normally indicate price being trapped or held down in order to encourage more retail to "buy the dip" or buy on support as these are some of the most basic tools and strategies taught to retail traders. Now one thing to remember when all of these traders/investors are in there positions from this level, there will be a large number of these traders protecting capital with stop losses, normally under the level they where buying at. This now created a liquidity pool...... You see every stop loss on a BUY order, becomes a SELL order, and with so many BUY orders created and entered at a specific level that means the stop loss orders are stacking more and more on top. Think about it like this, if we hit 30k and someone buys $1m worth, that means there is possibly a SELL order (via a stop loss) of roughly 1m under that level.... now we hit that 30k level again, and someone buys some more, maybe another $1m worth... well now there is roughly $2m worth of SELL orders in that stop loss zone. Hit that 30k super sweet safe support level 5 or 6 times and all the sudden you could have 8-10m worth of SELL orders at a single price point below support. Now if I wanted to enter this market long and I had 10m order to fill, it would make sense for me to run the price down to clip these stop losses creating a large amount of selling straight into my pig of a buy order. Once my orders filled I can stop holding the price down and let the price begin to organically rise again, this often creates fomo for all the retailers who just got knocked out of there trades from "tight stop losses" to chase the market back in only adding to the momentum and mark up of my position. The same thing can happen in vice versa when they are covering or exiting a position as well, and its often followed by a square up to reduce or remove the risk taken on to manipulate the price during there accumulation or distribution of there order, more specially into a short position as they take on more exposure to the underlying asset to manipulate the price, in a long there exposure is fiat and there isnt any need to cover. (ill explain square up in detail next time) This is often what is referred to as a liquidity grab and its how big players enter the market, they do not chuck a limit order in on Binance and hope for the best... I hope that made sense and added some value, but if you have any questions please chuck them below
Education
by DeNomics
6
Understanding the NFP EU PumpHere are some questions I put out to my community group the other day followed by the answers. The reasoning being the move has been annotated on the chart. Why did price slowly decline prior to NFP? - Price had to decline slightly before NFP to mitigate the impulsive move created earlier in the day. - Price had to stop out break and re-test buyers with a tight stop loss - Price had to lure sellers into the market before NFP Why did price reject the exact box marked before skyrocketing? - Price skyrocketed because it had gathered enough liquidity from stopping out the buyers. - It utilised the previous order block to skyrocket to take out the impulsive sellers before NFP.
Education
by AlkalineFX
The most liquid Forex currency pairsThe liquidity of a currency pair in other words is the ability to liquidate any amount you need (sell, for example) when you need it, without tangible loss of time and income. The higher the liquidity of the pair, the more reliable and attractive it is for trading. This implies that there is strong demand and high supply for this asset. The higher the liquidity of the market, the faster you will be able to complete a deal on the position you are interested in. The price in a highly liquid market moves gradually, in small steps. Less liquidity leads to large price jumps as well as gaps in the chart. What major currency pairs do you work with? Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
17
Basic Concepts of Liquidity Truly understanding 'why' the market moves through basic concepts of Liquidity This basic analytical overview is derived from the institutional methodology used at Phantom Trading. We use this institutional methodology commonly known as 'smart money concepts' in conjunction with additional pieces of confluence to utilise Liquidity around the factualities of the market. Within the graphic is 'reads a story of transitional money flow' in a clear, concise manner based on a 'vanilla / utopian / textbook' setup. At the extremity we can see the absolute 'swing high' creating a BMS (Break of market structure) followed by an impulsive continuation to the downside showing 'Bearish' Intent, the market tapping into demand & buy side liquidity has then correctively navigated back towards the previous swing high, printing what is commonly known as a 'double top' where several 'trading styles / types / characteristics' come into play - Front running 'Breakout traders' , Double-top' traders and the more patient Trend continuation', 'Breakout & Retest' traders. Knowing and understand concepts of Supply / Sell side liquidity around these levels we classify these as EQH - equal Highs as Liquidity is manufactured in these specific regions filling bids & offers. Once we have 'swept the liquidity' above the EQH it provides us with additional opportunities to Short the 'asset-class'
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by Trader_Warner