Original subtitles

The three different types of liquidity that I focus on and

the three that I believe are the most important to be aware

of is gonna be trend line liquidity, support and

resistance which I would also classify as a range in some

cases and then equal lows equal highs otherwise known as double

tops and double bottoms. So if we start on a trend line

liquidity we're gonna be looking at this as an ups

sloping trend line for our example. So traders are taught

to buy at a trend line or wait for the breakout to go short

and then vice versa when looking at a down sloping trend

line. So as you can imagine this creates lots of liquidity

at these areas um that the markets will usually manipulate

to grab liquidity before a larger move can take place. So

if we jump onto Euro USD we're gonna be looking at a down

slope in trend line for example. So you can see we're

clearly bearish putting in these lower lows and lower

highs. We had one tap, two tap, and then a third tap of this

trend line. Note how the wicks are meeting perfectly. Now this

isn't really a coincidence because you know people with

large pools of money or large institutions they know that

retail are looking for these sort of patterns so they're

gonna manipulate it so they entice them into the market.

Now if we look at this third tap of the trend line you can

see we had a nice reaction. A retrace candle. So this gives

us all the signs for entering. So this is what traders are

doing. So they're they're looking at trading this to

continue with this trend. Stop loss likely gonna be above this

high which is also above the trend line. So this is the

trade. So let's see how it plays out. So we get a nice

push off. So read a bit of profit. Now it's not likely

that you're gonna move to break even. Um some traders might but

we didn't we barely met one percent. Um And then you can

see prices now reversed and we've broken the trend line and

we've broken above this high here. So this is essentially

taking that liquidity from the sellers who who is in this

trade here. But what we also have with this is the breakout

traders. So the traders that are looking at this as a break

of trend line. Break of this higher. They have stopped

losses. Uh sorry buy stops. So buy stop orders above the trend

line. So something like this and they're probably looking to

target you know the 90% as people like to say. Of this

descending um sort of channel. So you know they they get

triggered in to the buy stops so they're expecting that move

to the upside. So what's likely gonna happen? Well price pushes

up bit of profit and then we range. So this is building

liquidity. We do also have equal highs. But then you see

price comes down. And eventually it puts in that new

low. So what we've done here we've taken liquidity from

sellers and we've taken liquidity from buyers. So now

that we've taken liquidity and we've got the fuel. To actually

move the market. That's what's gonna happen next. So we can we

can now see a move. You know in in One Direction which is what

we got here. So you can see price then commits to one

direction. Because it it now can because we've taken

liquidity from you know buyers and sellers. This this happens

you know all the time and it's about just understanding why

price is doing it. This needs to happen um in order for price

to move. Liquidity needs to be you know swept for a larger

move to happen. So if we just go back onto um this diagram.

We're gonna look at the second type of liquidity um which is

gonna be support and resistance. So in my opinion

this can also be classed as a range in some cases. So again

traders are taught to buy at support. So if you look at this

diagram here we have you know price come down up down up. So

it is a range but this is also a form of you know some

resistance and some support because you can see price has

respected once, twice, three times. Okay so we have buyers

down here and traders looking to sell up here. So again this

generates large amounts of liquidity above resistance and

below support. Um So unlike us as you know average traders um

we can buy and sell at any price at any time we really

want. And that's due to the facts of our position sizes.

But this is not the case for large large banks and large

institutions who have you know huge amount of money. They need

a reason to buy and sell. So what that means is they can't

just open positions whenever they really want. They need buy

from someone who is selling or sell to someone who is buying.

So if you were going into a store and looking to buy

something but no one was selling then you can't buy. So

the same concepts apply to what we're looking at here. So if so

many of these traders are buying at support then then

means that the large banks can't also be buying from the

them areas. This is why we see these areas in the market

manipulated which gives the market fuel to move. So what we

usually see from this so-called support is we will see a grab

of liquidity before price then reverses you know then taking

liquidity from this resistance or by side liquidity before

then reversing again. So it's not uncommon to see that on the

charts. It happens all the time. So now back on the charts

we're gonna put the trend line liquidity and support and

resistance together and show you how it's manipulated. So

again you can see we have an up slope in trend line. So we get

one well essentially one, two, three, four. Which is you know

perfectly meeting with the trend line as you can see. We

have firstly so we have one two maybe maybe buyers are getting

involved here but there's definitely gonna be buyers

getting involved you know as we tap here nice retrace candle

stop losses below this low and looking for them higher prices.

So granted price does come up. We form equal highs at this

area. Price then reverses so you know maybe some break evens

beard um taken here but then again price didn't really break

any any structure or any highs. So then price comes back down

takes liquidity from anyone that's in these buyers from

here so it if we have buyers that got involved here it's

likely that they're gonna be if they're holding their trade

that they're gonna be managing their trade at the lows.

Because as we know that there is liquidity at every high and

low in the market which prior you know tries to move to you

know in order to get that liquidity needed. So this is

what's happening here. So we push down breaking these lows

here. Pricing comes back up and also for anyone who sees this

as a break of trend line. As you can see we wick it here. We

pull back. We break structure. And we break this trend line.

So we have sell stop traders or people with the breaking retest

looking at this to get involved short. Pricing comes back up.

We form equal highs also known as resistance. So we have

sellers getting involved here. And then price pushes off it

then pushes up. So this here is nothing more than a liquidity

sweep of these highs. Anyone who's oozing sells or anyone

who's trading this as a breakout of resistance.

Something like this. You know they're looking to go long

after this nice break. So they're most likely to happen.

Well we've taken liquidity and then you can see how the next

two candles are you know huge momentum which you know these

two candles is the same size as this whole sort of range here

because price now has a reason to move. We've taken liquidity.

Price can now move and commit in one direction. But as that

as that's been said we do have a push down to this low here we

have equal lows and let's see what happens next. Okay so we

push below that that low and then we do push back up which

was likely you know a reaction from an area looking left but

what can you also notice about this reversing price here? Well

we have equal lows here. Let me just delete this trend line

off. So this is equal lows. So you can see we have one low.

Pricing come back to it. So it's it's a double bottom but

we know it has equal lows. So we know there's liquidity at

this area below it. So price wicks it here. Which is just

grabbing liquidity and then we can see price reverse and break

above these highs here. So this is what's happening on the

charts uh day in day out. This needs to happen. It order for

the markets to move. So you can see that anyone that thinks

that this is just coincidence you know how price comes down

to this low at the the candle bodies we then wicket below

before a nice move in the other direction. So it's not

coincidence. You know it's happening. We see one two

three. So a clear level of resistance or equal highs as we

know it. Price then comes up above it. Anyone selling or

already sold from here. Taking liquidity. Huge momentum down.

Sell side liquidity, wick, reverse. You know, it's

happening every single day and the more you sort of go and

back test this and understand that this happens all the time,

you know, the better you'll be able to see it and basically,

be on the correct side of the market and not trade any of

this support and resistance sort of nonsense cuz that's

what it is really. So, if we at this next example on dollar

Swiss of equal highs. We can see previously we had the

series of lower lows and lower highs. So we broke structure

here. Price pullback to mitigate breaking structure.

Price pullback to rebalance. This inefficiency. Breaking

structure and what we can do in lower time frames from here is

refine this down. So what we can see is we have this 1 hour

wick which I've marked off with this zone. So as we've learnt

already a week is just a area of interest on a lower time

frame. So this wick on a 15 minute would be like an an

order block or you know AA supply zone where we can short

from. But if we zoom in we can see we're continuing to stay

below the the lower high so we're breaking structure.

Breaking structure. Now we push up and we actually break above

this structure here it. But as we've discussed already it's

about how it breaks and what is it what is it showing us as

it's breaking. So you can see we've got a calm and sort of

corrective break which is mitigating this wick as we know

on a low time frame to be a an order block. So this is about

how you know reading price and and what is it telling me? So

we can see it's it's not any momentum in the break. We have

one candle but you know we're not breaking with momentum.

This is just taking liquidity from these equal highs. So as

you can see I've put on we have a high and a high. So this is

an equal high. Price comes above. Taking liquidity from

anyone who's in short. You know who's trailing stop losses or

getting short from you know wherever they're getting short

from. There is a lot of traders in this market. So this is just

seeking liquidity and then you can now that we've done that we

can then see momentum in that direction. So once we break

structure here we're still we're still bearish because

we're looking to see how it breaks and what is what it's

tapping into as and we can see it's an hourly wick. So if I go

down to a fifteen You can see them equal highs clearly. You

know people looking to short from this from these areas

here. Nice retrace. Price taps up. And then you can see that

that's the order block. That's the wick on the hourly. Broke

price, broke structure. As you can see here, and that's the

last up candle before the down move that broke structure. So

you can see we have entries in here that we can take advantage

of um on a lower time frame but this is just showcasing you

know when when the market has shifted and when it hasn't

shifted and we can identify that by looking at price action

and seeing how price is breaking structure and what is

tapping into when we look left.