Liquidity Trading
💎 Example Trade 💎
Logic behind this set up
For big institutions with a need to fill large orders, a market’s liquidity has a big impact on price. The creation of a liquidity level comes as a result, of an initial imbalance of supply/demand, which forms what we popularly known as a swing high or low. As more players take positions in the market, these are levels where market participants will use as a historical reference to place their stops. The binary outcome here can be a breakout of the level or a reversal back to the mean.
Indicators
Liquidity Levels + Extreme SR Levels + Buy/Sell Algo
Time Frame (TF)
H1 & H4 are recommended. However, if lower TF holds the similar bias as HF, then it is still valid, e.g. If price bounces from H1 support and showing bullishness then in lower TF (e.g. m15, m5 or m1) after a pullback we can still enter long.
Long Entry
Price reaches at support zone and showing weakness, such as wick rejections, weak momentum from sellers and Buy/Sell Algo is firing the similar bias.
Short Entry
Price reaches at resistance zone and showing weakness, such as wick rejections, weak momentum from buyers and Buy/Sell Algo is firing the similar bias.
Extra confluence
Exhausted candle, future significant key levels, long term extreme levels. Therefore, these will work as complimentary confluence but midterm and long term liquidity levels/zones will be the main confluence.
Note
Works also with Heikin Ashi candles. Do proper risk management.
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