‼️WHY DO TRADERS NEED TO UNDERSTAND LIQUIDITY RUNS?
Have you ever entered a trade, only for the price to hit your stop-loss and then move in your expected direction?
Understanding liquidity runs can help you make better sense of these market movements.
WHAT IS A LIQUIDITY RUN?
A liquidity run happens when price moves toward areas where orders are concentrated, often around previous highs, previous lows, and key support or resistance levels.
🔴 Buy-Side Liquidity (86,000–86,800): Above previous highs, where buy stops and breakout orders may be clustered.
🔵 Sell-Side Liquidity (82,500–82,700): Around previous lows and support, where sell stops may be resting.
🟢 Sell-Side Liquidity Run (80,000–80,300): The chart shows BTC dropping sharply below nearby lows before recovering. This may indicate a sell-side liquidity sweep, but confirmation is still needed.
WHY DOES A TRADER NEED IT?
Understanding liquidity helps you identify important price areas, avoid chasing breakouts blindly, and wait for confirmation before entering a trade.
After a liquidity sweep, watch for rejection, a change in market structure (CHoCH), and follow-through. These clues may suggest a potential reversal, but a sweep alone does not guarantee one.
Remember: Don't just watch where price is going. Understand what price is testing along the way. Always manage your risk.
If BTC sweeps liquidity below support and then moves back above it, would you wait for confirmation before entering a trade, or enter immediately?
Share your thoughts! 👇
$BTC
$ETH
$SOL
Have you ever entered a trade, only for the price to hit your stop-loss and then move in your expected direction?
Understanding liquidity runs can help you make better sense of these market movements.
WHAT IS A LIQUIDITY RUN?
A liquidity run happens when price moves toward areas where orders are concentrated, often around previous highs, previous lows, and key support or resistance levels.
🔴 Buy-Side Liquidity (86,000–86,800): Above previous highs, where buy stops and breakout orders may be clustered.
🔵 Sell-Side Liquidity (82,500–82,700): Around previous lows and support, where sell stops may be resting.
🟢 Sell-Side Liquidity Run (80,000–80,300): The chart shows BTC dropping sharply below nearby lows before recovering. This may indicate a sell-side liquidity sweep, but confirmation is still needed.
WHY DOES A TRADER NEED IT?
Understanding liquidity helps you identify important price areas, avoid chasing breakouts blindly, and wait for confirmation before entering a trade.
After a liquidity sweep, watch for rejection, a change in market structure (CHoCH), and follow-through. These clues may suggest a potential reversal, but a sweep alone does not guarantee one.
Remember: Don't just watch where price is going. Understand what price is testing along the way. Always manage your risk.
If BTC sweeps liquidity below support and then moves back above it, would you wait for confirmation before entering a trade, or enter immediately?
Share your thoughts! 👇
$BTC
$ETH
$SOL