CHART PATTERNS MASTERY COURSE: MODULE 6: ADVANCED PRICE ACTION | DAY 34
LIQUIDITY: The Fuel Smart Money Hunts
Every obvious high and low is a pool of stops. Price is drawn to liquidity like gravity.
WHERE LIQUIDITY SITS: Liquidity is a cluster of stop orders and pending orders. It gathers where traders place stops: just beyond obvious highs and lows.
🟢 BUY SIDE LIQUIDITY (above highs): Sits above swing highs and equal highs. Short sellers park stops here. Price sweeps up to grab it before dropping.
🔴 SELL SIDE LIQUIDITY (below lows): Sits below swing lows and equal lows. Long buyers park stops here. Price sweeps down to grab it before rising.
THE GRAB AND REVERSE:
HOW A LIQUIDITY GRAB PLAYS OUT:
1️⃣ Price runs into an obvious high or low full of stops.
2️⃣ A sharp wick sweeps the level, triggering those stops.
3️⃣ Price rejects hard and reverses, leaving a long wick behind.
4️⃣ A CHoCH confirms the true move in the other direction.
THE MINDSET SHIFT: A stop hunt is not bad luck. It is the setup. Trade with the sweep, not against it.
DAY 34 KEY TAKEAWAYS
🔹 Liquidity rests beyond highs and lows
🔹 Buy side above, sell side below
🔹 Sweeps trigger stops then reverse
🔹 Trade with the sweep, not against it
Next: Day 35 | Order Blocks ➡️
#Liquidity #SmartMoneyConcept #PriceAction