Once You Learn Liquidity, Trading Becomes Embarrassingly Simple

Once you learn how to read liquidity, trading becomes a whole lot simpler. The trading industry has done a wonderful job overcomplicating what should be very simple concepts and turning them into something much more complex. That's why there's thousands of different strategies on YouTube. That's why there's thousands of different indicators. And if you've been a victim of what I call this YouTube death loop of continuously trying and failing different trading strategies, then it might be time to take a step back. The trading strategy I use is based off of liquidity. Liquidity is what actually moves. Not a bunch of random indicators. Not a bunch of super complex topics. You think a couple of lines on your chart is what actually moves price? I mean, come on. Obviously not, right? The market moves based off of orders. And you can learn how to spot these orders in the market by using something called liquidity. So by the end of this video, you guys will view the market from the lens of an experienced trader. You will finally have a foundation in trading that has a legitimate edge in the markets. So without further ado, let's jump into it. Okay, so starting with the basics, Liquidity is money. Okay. Liquidity equals orders waiting to be filled. Price moves to where the orders are. Very simple stuff. Okay. This is the foundation of pretty much any profitable trading strategy. So we're going to draw this out. So you guys don't forget it. Liquidity equals money. All right. Money and money is what actually moves price. When we're viewing liquidity, we're looking at buy side and sell side. All this means is whether these liquidity levels are above or below price, okay? Let's say this right here is the current price. These highs that we have above the current price are going to be the buy side liquidity levels. These levels below the current price are going to be the sell side liquidity levels. There are orders above and below these highs and lows in the market. Let's think about it logically here for a second, right? Say someone went long right here or retail traders went long anywhere on this current move. Where are they putting their stop-loss? They're most likely putting their stop-loss at this swing low or right below this swing low as they're in validation. The opposite is true for short positions. Where are you putting your stop-loss? Above these highs, okay? This is why a major part of my trading strategy is waiting for these people to get stopped out, right? I never enter a trade. Unless I know for a fact that certain people have been stopped out. There's a saying that goes, wait for the manipulation or you are the manipulation. Okay. So these are the buy side and the sell side levels. Keep this in mind. Now there are two types of liquidity. We have external liquidity and internal liquidity and external liquidity level are going to be the most obvious swing points on your chart. So if we're looking at this chart right here. This would be considered an external high, right? It is the most obvious high within this current price action range, right? This is the most obvious high that we can see on our chart. So we would call this an external liquidity level. These two highs kind of in the middle of this range would be considered internal liquidity levels. This low all the way down here would be considered an external liquidity level, right? The most obvious low that we see on our chart. So a lot of times external levels are just higher timeframe liquidity levels, right? On a one, maybe a four hour timeframe. And everything in the middle is going to be what we call internal liquidity. Now you can see here, we also. have this gap here that we're calling internal liquidity as well. This is something called a fair value gap, okay? And it is a major part of the trading strategy that I use. You guys should all know what fair value gaps are at this point, so we're not going to jump into that in this video. We know that there are orders inside of these fair value gaps as well. So we would call those fair value gaps here internal liquidity. So we have internal, internal, internal, internal, and then the two external highs, and then the two external levels on our chart. Now, Price moves in two ways. It either moves from internal liquidity to external liquidity, or from a fair value gap to a high or low, or it moves from external liquidity to internal liquidity, from a high or low into a fair value gap. These are the only two ways that price can move. So when I'm looking for my trading model, I'm either looking for longs off of this fair value gap, or I'm looking for shorts off of this high. Back down to target an unfilled fair value gap. So just by understanding where the orders are on your chart with this internal liquidity, aka fair value gaps. And these external liquidity levels, where we understand there are orders above and below these levels, we can predict where price is going to move. For example, here, if I'm looking at this chart, there are really only two scenarios that can play out, right? Scenario one would be a retrace to this internal fair value gap, and then see a move higher, or maybe something like this, where it sweeps this low and taps into this lower internal level. So this is where I'd be looking for longs, or price can sweep this high first, generate low resistance liquidity, and then we And we can get a short back down to this unfilled fair And real quick, guys, if you want to learn the exact model that I use on a day-to-day basis, make sure to check out the pro group down in the description below. You'll notice that my top students and I take the same trades every single day because we're using a mechanical framework that is based on what actually moves price, which is liquidity. You'll also get access to my custom coded indicators. So if you guys are interested, I will leave the link down in the description below. All right, back to the video. Now that you understand the basics of liquidity, we can talk about draws on liquidity. This is where price is gravitated towards, and this is how I create my pre-market scenarios. Before the New York session even opens, I already know exactly what I'm looking at because I have my draws on liquidity marked out. So using what I just taught you guys, there are different types of draws on liquidity. You have previous day highs and lows, session highs and lows, previous week highs and lows. These would all be considered external liquidity. And then you have your equal highs and lows, higher time frame fair value gaps, your data highs and lows, or something called low resistance liquidity, which we will be jumping into. Now, I know this looks like a lot, okay? And you don't need to remember all this. I'm going to show you the single price signature that I look for every single morning, but it is important to understand why price actually moves the way it does and just understand that it is gravitated towards these levels. Now, this is something called low resistance liquidity. This is arguably the most important factor of my trading strategy. In fact, In fact, if you trade the model I trade, which is called the DTE method This is one of the most important factors. Incorporating LRL or low resistance liquidity into your trading strategy is probably the best thing you can do. Low resistance liquidity is stacked highs or lows in a row. So take a look at these highs here. You can see we have one high, a second high, and a third high. Notice how none of these highs take out the previous high. For example, this high right here does not go above this high, right? This high right here does not go above this high. It creates this sort of bearish trend line or what we would call low resistance liquidity. They're all relatively equal, all in the same area. We understand that there are orders above all of these highs. For there to be true low resistance liquidity, we need to see three relatively equal untapped highs. That price has not taken out yet. Now, this is not low resistance liquidity, right? You see how this high right here took out this high. This is called a liquidity sweep or a stop hunt. Again, this high took out this high. This is not low resistance liquidity. This is just chop, and you do not want to trade this. Along with low resistance liquidity, there is something called high resistance liquidity or protected highs and lows. This is when you get a liquidity sweep inside of a fair value gap, going back to internal versus external liquidity. If you take a look at this price signature here, you can see that price is sweeping this low. Inside of a higher timeframe fair value gap, this low right here is now going to be a high resistance low or what we would call a protected stop loss because price already grabbed all the orders below this low and it grabbed the orders inside of this fair value gap. So there's very few orders below the current price. Now what's above price? Well, you can see we have one, two and three untapped highs. So this is going to be a low resistance as our target and high resistance at our stop loss. These are the trades that you guys want to be taking. You never want to be targeting high resistance liquidity. For example, if we got a short setup here, I would not take it because we are targeting high resistance liquidity. So if you guys trade my DTE method, the T in DTE stands for target. You must have a lower timeframe draw on liquidity leading into a higher timeframe draw on liquidity. Take note of this price signature here. We have our lower timeframe draw on liquidity. With these internal liquidity levels being this low resistance liquidity leading into what? Our session high. Maybe this is an Asia high or a London high. So we have our lower timeframe DOL leading into our higher timeframe draw on liquidity, which you can see right here. Now, a very simple way to figure out your bias for the day is to simply count the draws on liquidity. Let's count the draws on liquidity below price. Well, we don't have any draws, right? This low took out another low inside of a fair value gap. So we have zero DOLs below price. Maybe we have a session low all the way down here or something. So we'll say we have one draw on liquidity to the downside and let's count how many draws are above us. We have one, two, three, four untapped highs above us. And obviously we're high timeframe bullish. So we have four DOLs above us and only one below us. So where do you think price is going? It's most likely going. Take out these orders here and then either reverse from the session high or potentially run this high and continue higher, right? But ultimately we don't care what price does after it hits our take profit We're just looking for our piece of the pie and this is the exact setup that I look for every single morning So two questions to ask yourself before you get into a trade am I targeting low resistance liquidity into a higher time frame draw? Is my stop loss protected? If the answer is yes to both, you can look for an entry. Now let's go over some real chart examples over the past couple of weeks so I can show you guys what this looks like using real price action. Okay, this is actually a perfect example using real-time price action. Look at how many untapped lows, how much low resistance liquidity there is. In the market right now, okay, you can see that our manipulation X indicator automatically identifies this low resistance equity for you and even shows you these untapped fair value gaps. So we have a ton of draws lower, right? We have the Asia low, all of this low resistance liquidity, right? These untapped bullish fair value gaps. If you had to guess where price is going over the next 12 hours, where would you guess? Well, it's probably going to go lower because we really don't have many draws higher. Except for this weekly fair value gap, but we have all of these draws lower. So in this situation, what I would look for would be for price to inverse this 15 minute bullish fair value gap. And then I would look for continuation shorts to take out all of these lows. So I have a very bearish bias when I have all of this low resistance on my chart. Okay, let's take a look at yesterday's price action during the New York open and why this short position here was valid. This was a trade that a bunch of my students ended up taking. So you can see the 9.30 market opens right here. And what do we do? We immediately seek out the internal liquidity at this hourly bearish fair value gap. But what do we leave behind? Well, we leave behind that three touch point low resistance liquidity, right? We have one untapped low, two untapped low, three untapped lows leading into what? An untapped hourly and an untapped 15 minute fair value gap. So my draw on liquidity is going to be bearish. We are inside of a bearish fair value gap. We have all of these lows below. I really don't have any sort of draws on liquidity higher. So all you're going to do is wait for your entry trigger, which is going to be your V-shaped inversion fair value gap. This is a trading model that I personally use. Okay, so there is your entry, and you are simply targeting your draw on liquidity for the day. Our indicator also alerted this as an A-plus setup. Look at that. High time frame delivery, volume, session DOL, and a V-shaped IFEG. And this one obviously rips to take profit. where does price reverse from price sweeps into this hourly bullish fair value gap putting in a protected stop loss this is what i just showed you guys in the presentation there's that internal stop on inside of an hourly bullish fair value gap there is your lower time frame low resistance liquidity right you have one two three four relatively equal untapped highs and you end up getting your inversion fair value gap on this bullish candle right here inversing this bearish fair value gap You also have a change in state of delivery. So I would simply target the top of this low resistance liquidity for around a one-to-one And we let price play out And you can see this also instantly hits take profit. This was also a scenario that I posted in advance inside of the Pro Discord. Again, if you guys are interested in learning this model from myself directly, make sure to join the Pro Discord down below. I host daily live lectures teaching this exact model live every single day. You guys can ask me questions, learn from myself and our other pro coach and really just speed run your profitability. Again, the link for that will be down in the description below. Notice how price is moving, right? It is moving from internal liquidity at this bullish gap To more internal liquidity, right? It is moving from external liquidity, sweeping this high inside of an hourly bearish gap to high timeframe internal liquidity It becomes very mechanical very systemized at a certain level. Okay, let's go to the following day. This was a trade that I ended up taking the day before in New York session. Just an absolute textbook trade. It really does not get much simpler than this. indicator called this one as well So let's go into replay mode to market open. On a higher timeframe, we can see that price is inside of this hourly bullish fair value gap. What does that mean? Well, it means we're looking for longs. We're looking for price to move from internal liquidity to external liquidity being this high right here So this is my main scenario for the day and what I posted in the Discord. Now, understanding this, dropping down to a lower timeframe, a one-minute timeframe during market open, we can see that price opens low at market open, generating what? Low resistance liquidity, right? We have one, two, three, four, five six untapped highs here. It's actually a little bit easier to see on a 30-second Look at all of these relative equal highs here On a lower time frame heading into market open this is generating liquidity All you would do is drop down to a lower time frame to look for your entry model. I personally entered here on a 15 second inversion. So there is my entry. My stop loss is at the swing low. And where am I targeting? I'm targeting the top of this low resistance liquidity. Which was this high right here, going break even at the most internal high, right? The reason why this trade played out has nothing to do with the inversion fair value gap. Yes, this is my objective entry model, but this is not why price played out. Price played out because of the liquidity, all of these untapped highs, all of these orders above that price is gravitating towards. So you press play. There is my stop loss to break even. And there goes my full TP. I ended up taking this across all of my funded accounts. Really, really nice trade there, okay? So again, take note of this setup. Low resistance liquidity being generated, heading into a key open. Price manipulates into your higher timeframe bullish fair value gap, and then you target that low resistance. What is at my stop loss here on this trade? Let's say I took this on a 30 second, right? I don't even have to take it on a 15 second. I could have entered here on this 30 second change in state of delivery and move my stop loss to maybe this high right here. What is at my stop loss when I'm entering this trade? I have high resistance at my stop loss, okay? We are inside of a bullish fair value gap. Let's see, we just swept all of these lows and what am I targeting? I'm targeting all of this low resistance. So HR at my stop loss or high resistance and LR at my take profit. Low resistance. This is the difference between the trading model that I use and the trading strategies that a lot of you guys have used in the past. They are not logical strategies based on where orders lie in the market. The reason why I'm able to get a consistent 70% win rate at a one-to-one, do backtesting videos on this channel and have an 82% win rate is because I understand where the orders are in the markets and I understand how price moves. Price seeks liquidity. Liquidity equals money. Money is what moves price. So even if we were to be bearish for the day, we should still take out these highs first before then reversing. Okay, let's take a look at another trade that we got the day before. This is the most perfect example of how to trade liquidity. Let's turn the indicator off for a second here, okay? If we go to a 15-minute timeframe, what do we see? Well, we see that price is inside of a 15-minute bullish fair value gap. Dropping down to a lower timeframe here, what do we see above us? Well, we have low resistance liquidity. One, two, three, four untapped highs here, creating low resistance liquidity. And what is at our stop loss? High resistance, right? We have a liquidity sweep or a stop hunt inside of a higher timeframe bullish fair value gap. I'm using the 15 minute, the one hour and the four hour fair value gaps for my delivery. So if you're following the DTE method, this is going to be your delivery. This is going to be your target. And what is your execution? Your execution is going to be a V-shaped. Inversion fair value gap. There's your one minute V shape. Did we get a better entry on a 30 second? I believe we did. So here is your 30 second entry with this V shaped inversion right here. Again, your stop loss is very high resistant because we have swept a low inside of a fair value gap. We have high resistance at our stop loss, and we are targeting all of this low resistance and watch how price delivers just beautiful trade straight to our take profit. Nearly a one to three risk to reward. These are all these setups that you guys want to be taking. And the reason why these play out has nothing to do with the entry model. It has everything to do with liquidity. Well, guys, that's going to do it for this video. Make sure to leave a like if you have enjoyed. If you found value on this video, imagine how much value is inside the pro discord. Every single day at around 10 a.m. Eastern, I'm going live with the discord to go over setups like this and actually teach you guys this model. Nearly all of these trades I'm calling in advance inside of the pre-market analysis channel. You guys can see exactly what I'm looking for every single morning before the market opens. And you'll notice that my top students and I, we're all taking the same trades, right? Because we're all trading based off of liquidity, using a mechanical system, the DTE method, we're all getting in on the exact same trades every single day. This is the power of using a trading model that has a legitimate edge in the markets. The edge is undeniable. The same setups happen every single day. If you guys are interested in joining the group, I will leave the link to that down in the description below. That's going to do it for me. Subscribe to the channel for more trading content. And I'll see you guys next video.