[00:01] concepts have completely overtook the trading space. But here's the problem. Most people are using these concepts completely wrong. I realize that there's actually matters and what doesn't matter. So, I'm going to explain all of
[00:14] the smart money concepts that actually matter so you can focus on what actually works, which is implementing these concepts into your trading. feel like everybody knows the most about or have heard of about is liquidity.
[00:28] This is the foundation of smart money concepts is the foundation of how I personally trade. Every single trade that I take has the foundation of liquidity. So what is liquidity in the most simplest terms possible? Don't
[00:40] confuse it. It's literally just highs and lows in the market. Why is liquidity that's where a lot of orders and liquidity is resting at these areas. So that's, you know, going, you know, back and forth and, you know, we're making
[00:55] blah. And let's say this is a consolidative range. These areas are where liquidity is resting above these highs. Basically, what the foundation of why we use liquidity is because one of the reasons why markets move is to hunt
[01:08] liquidity. These concepts are based around the idea that an algorithm runs algorithm runs the market or not, I where I think a lot of people have a problem with ICT because they believe
[01:20] algorithm runs the market. In my opinion, I don't really care if an algorithm runs the market because the concepts work. So liquidity for me is I want to understand where is the market drawing to. What high or what low do we
[01:33] want to go to using some of the other concepts that we're going to talk about manipulation. So for example, all you need to understand with liquidity is start recognizing highs and lows within the market. All liquidity is in the
[01:45] market is it's a constant basically exchange of buy side liquidity to sellside liquidity. So if we're in a trending market and we're kind of selling back off, what will happen is any of the liquidity that we leave,
[01:57] right here, right? This becomes buy side. What will happen is when the market reverses, what we'll do is we'll go back to that area of buy side liquidity above all of these highs is buy side liquidity. So what I'm doing
[02:09] when I have an understanding of oh there's a lot of equal highs here or example, let's say we've now sold off and we want to look for a reversal. I for a trade. So, where would I maybe take a trade? Possibly right here. The
[02:24] market displaces back up, pulls back to probably a fair value gap, which we'll end up bouncing and then targeting basically buy side liquidity. Now, it's as well. Let's say, for example, we have, you know, almost like a
[02:38] consolidative range and we're kind of moving higher and we end up breaking higher. If I look at this, what I'm saying is, okay, all of these highs that we had right here is buy side liquidity. I can also notice that there's lows
[02:50] here. All of these lows is called low resistance liquidity. So, it's the this low. We know that there's liquidity liquidity resting at this low. If you've ever seen like, oh, a trend line
[03:02] low resistance liquidity. Again, you can matters is you being able to see it for what it is. So for me it's liquidity. What I then wait for is a false move higher and then a break to
[03:15] we're taking then internal liquidity having a change in the state which is just a break of structure pretty much breaking structure to the downside below this low and then this is when I look to possibly take a short and we then what
[03:29] go target the opposing liquidity pool right so sellside liquidity when we go liquidity is. It's highs and lows. So a couple things that you should understand something called internal and external liquidity. And basically what the
[03:41] difference is between this is price is fractal. Meaning because the market frames. One candlestick can be represented in so many different ways, candlestick. This could be a 5m minute. This could be a 15-minute. This could be
[03:56] a 4 hour, right? Like this could be so many different things, but yet it looks the exact same. So what this means, the market will form the same things inside for example, if I was to mark out a similar chart that we just did where
[04:08] it's like, hey, the market comes up, maybe put on a high, maybe come back get the idea. Buy side liquidity, sell side liquidity. Now, this is my external side liquidity. Now, this is my external and this is my external. So, these is my
[04:21] external range. Anything in between this is internal liquidity. So, this is internal liquidity. This is internal liquidity. We took internal liquidity came back down. And then we'll most likely continue towards external
[04:33] liquidity. And what you'll find is the market is this constant exchange of generate buyside. Okay, so the market moves back higher, we put in equal then we come up to take buy side and then possibly fall back inside the range
[04:46] to then go take sellside liquidity. This is the manipulation leg in which we're placement to the upside and then we fall back to go take the lows. There's a liquidity and the best trades that we take is when we can align the bias. So
[05:00] should go to internal liquidity and then there's also a reason why we should go same bias. Both are short, both are bullish basically. Another thing that high probability areas of liquidities are normally session highs. But what is
[05:15] this is is like Asia session, London session. So like what was the high and London session? These are high probability areas of liquidity in which we want to target. Another one is data highs or lows. So what data highs and
[05:29] lows are is let's say we have FOMC or 8:30 news and at 8:30 we end up having this big move and volatility spikes and now there's like a massive candle. The high and low of the time that that data was released. So for example, a lot of
[05:43] the times what we'll find is this happens at 8:30 news release of a red folder and at 8:30 news we'll put in a data candle. the high of that candle or the high of that initial volatility move is a high probability area of buyside
[05:56] release is high probability area of sellside liquidity. So I would always lows. And then my last one is just relative or equal highs or lows. So when lows or highs are stacked um a lot of the time this is an area in which I want
[06:10] target. So this is pretty much it. The basic foundation liquidity is one of the It's one of the most important things in any smart money concept. So, highly market in terms of liquidity. Now, let me also show you what it looks like if I
[06:23] view it. So, if I was to look at this chart on the 15-minute on ES, I would basically say, okay, well, notice all of these stacked highs, right? This would to then check is there maybe a session here. So, I just use an indicator. I
[06:37] and I can say, hey, this is New York previous session high and then there's here. So, I know that like a lot of this is low resistance liquidity, meaning I'm and so what's to the left of us? Like, why would I expect price to not go lower
[06:53] buy side? But what would I need to see for buy side?side. I need to get some Right? We ended up doing the same thing. Low here and low here, right? So, we end what I want to see is I want to see displacement back up and I would expect
[07:07] liquidity. Right? So, we end up continuing to sell off, continuing to displacement yet. So, I wouldn't really be looking to take a trade yet cuz right now we're just rebalancing um on this previous price range, right? So, I still
[07:20] maybe the sell side marked, but I need to see what the reaction is of of the to see displacement. I'm waiting. I'm waiting. I'm waiting. I'm waiting. I'm waiting. Boom. We're starting to actually see displacement. Right here is
[07:32] my confirmation. So, I use change in the state, which we'll get into in a second. But a change in the state is basically the a close above or below the last candles. So again, this is confusing. It's not that confusing. Let me explain.
[07:48] This move is the last series of is a bullish candle. So I marked the high of this. As soon as we get above this, I am bullish and I'm expecting a reversal. So watch. I would look to see
[08:03] this hold. And this is where I could possibly look to take a long targeting buy side liquidity and my stop loss would be at the previous low. We end up much straight to buy side, right? So that's pretty much like my strategy.
[08:16] idea of where the market's going, where's buy liquidity, wait for a state, and I just long targeting liquidity. Like it's not hard. So in my or one of them and it kind of plays off of liquidity is just overall market
[08:30] this category. manipulation and things that I'm looking for with market structure. So when we go back to the there's highs and lows that rest within the market. So there's two things that
[08:43] revisiting a high or a low. For example, market comes up, we put in a high, what can we possibly do? There's only two things. Either manipulate, take the things. Either manipulate, take the high, lack displacement, reverse, or we
[08:57] can oh high continue, right? and we break through it and we end up having a things that we can do. Either we displace or we sweep it. When it comes to manipulation, when I look to tie this price signature with the idea of
[09:12] liquidity, if I know that if we lack displacement through highs, I expect a reversal. What could I then do if I knew that sellside liquidity was resting down here? Oh, maybe you're you're start you understand why this called manipulation
[09:24] now. Because for the market to go higher, we must go lower. for the market what happens is the reason why you feel like you get stopped out all the time in yourself up to be the manipulation. You are the liquidity that is being taken
[09:39] can reverse. So basically what I want to do is let's say this is sellside liquidity, right? This low right here is sellside liquidity. Excuse my terrible market comes down, you know, we end up putting a low in, maybe come back up,
[09:53] you know, bam, and maybe we're, you know, creating some buy side liquidity. So now sellside liquidity gets taken. What am I looking here? What's my bias? I'm not bearish. Why am I not bearish? Because the whole reason why I would
[10:07] initially be bearish is over was to go target sellside liquidity. Now sellside at? Well, I know buy side liquidity is resting right here. And also what are we doing? Internal liquidity. Internal liquidity. Internal liquidity. Right?
[10:19] We're generating liquidity while we're moving down to sell side. So what do I need to see? I need to see manipulation. Meaning on the bigger time frame, this could be manipulation, right? Cuz we're now taking all of this sellside
[10:33] back inside the range. Boom. And on the bigger time frame, it's literally this, low. We're lacking displacement through this low. But now what I do is I zoom in and I look for the same thing. Bear with me here. Think about this. Right? I look
[10:47] for the same thing. So what happens if I zoom in and then I see this? about external versus internal? Externally is this lows here lack
[11:05] range. But we're also doing it internally. One last move lower, boom, is where I'm longing. So this is when I look to take an entry bank target towards the opposing liquidity pool. But I'm looking for manipulation, meaning
[11:21] sweep of liquidity, a lack of displacement lower. So for example, if side, I want to see a lack of displacement lower. I want to see the market displace back higher inside of whatever range that we're looking for so
[11:33] that I now know I'm sweeping here and I'm sweeping here. And then once I get opposing liquidity pool. So another thing I use for market structure is equilibrium. So for example, if I was to draw out and say, okay, from the low
[11:46] that we created here, from the high that we created here, the midpoint of this is like here. So this is equilibrium. Now a lot of the times we will see price rebalance back to equilibrium. So what I want to see a lot of the times is if we
[11:59] are in discount so below equilibrium is discount above equilibrium is premium. If I am bullish I want to be taking longs in discount. If I'm bearish I want to be taking shorts in premium. This is basically another thing that I look for
[12:14] to understand market structure is if I'm looking to take a long I want to be in view price action. Again it adds more conviction. and it's better probability important smart money concept that I pretty much use every single day is a
[12:27] fair value gap. So there's two different types of things of a fair value gap. Let of them are. All right. So a fair value gap is basically made up of a three candle formation. So on the left side we have bearish sequence, right? Candles
[12:41] are going lower, price is going lower, and on the right we have price going higher. Now what basically a fair value gap is is it's the gap that is created left here and we can see these down closed candles. It's a three candle
[12:56] formation and we leave a gap to the downside from the low of the wick from the first candle to the high of the wick from this candle. So this is our fair value gap. So we expect price to come back into this and then possibly trade
[13:12] So this is a bearish fair value gap. It's basically just the gap that is created from the last candle that was printed, the high of it of the wick to It's the same thing with the bullish example. So for the bullish example,
[13:25] again, take the high of the first candle wick, low of the third, and again, this expect possibly price to come down again, hold this, manipulate, displace, go higher. Right? So now use what I just
[13:38] draw this out based off of what we just talked about earlier about liquidity and time frame free value gap which I'm expecting price to rebalance to. Keep in markets move is to rebalance to inefficiencies. So I'm expecting the
[13:52] market to rebalance to this fair value gap and again I'm going to draw this model out. Right? Boom. Boom. Displace back lower displacement. Bang. Right? bigger time frame for value gap in which I'm expecting to hold bullish. We have
[14:05] internal manipulation lacks displacement and then we have what our breakup what I do I enter long and then what am I looking for? Go target the buy side. Ah is it starting to come together here?
[14:18] So using bigger time frame imbalances not just for creating biases and reject but then looking at you know all move and then looking to take entries out of these bigger time frame preval
[14:30] Right? So these are bas this is basically how I view the market. Like more you're going to see how clear it actually is to see. So now we have to look at the other side which is inverse F value gap. So if those imbalances
[14:44] the exact same example we just said. So we still got this F value gap. Now what if price comes back down into this and we just we just immediately run it, right? Price comes back down. You know we're generating liquidity. Boom. And we
[14:57] then we come up. What do we maybe expect? So there's a couple things. A through this, hold on to it and then immediately get bought back up. This is bearish for value gap here that turns into an inverse. But this is sometimes
[15:09] this becomes a bigger time frame candle wick. What you'll find out is a lot of gets ran through, it'll actually turn into this where this candle on the really long wick and it'll look like this. So price ends up coming down
[15:22] running whatever imbalance we created on this move lower and then the bigger time and then we end up reversing back to the upside. Now let's say that this does get ran through but there needs to be context. What would make sense for this
[15:36] why would we possibly expect it to get ran through? Well, maybe there's sellside liquidity resting below. So, for example, let's say that there's a bunch of stacked equal lows resting right here acting as sellside. So, what
[15:49] We'll see price originally have you know a little bit of a move here and we'll liquidity you know maybe generating buy side maybe come back down tap this for value gap got maybe hold it once manipulate the high lack displacement
[16:03] change in the state boom sell off boom and then we get below this have initial lot just happened here but I need you to understand I'm going to point out is how the market moves generated liquidity buy gets taken we initially
[16:16] rebalance hold it what happens here value got boom inverse gets ran bang big imbalance or we wait for exactly what we talked about earlier where maybe low then change then enter right manipulation but notice what happens
[16:29] here buy side gets taken we lack displacement right keep in mind bigger the bigger time frame I boom lack displacement change right sweep we sweep it we do not displace it once this buyside level gets taken what happens
[16:42] here internal high lack displacement then change in the state bang breakup structure we displace below it come back rebalance possibly a bearish value gap looking at this bigger time frame, bullish inefficiency, and we're saying,
[16:55] "What the [\h__\h] is going on here? Why is this going to happen? What happens?" We break through it because we've buy's been taken and there's sellside resting below. There's context here. Not every imbalance will hold. Not every imbalance
[17:07] What's happening here? There's a bigger time frame for value gap. We come back, we rebalance, we come up, take buy side, buy side liquidity's been taken. What the range. So we go to what? Internal sellside liquidity. this low internal
[17:20] bigger time frame for VI gap. It acts as an inverse. So we come back up tap the work back lower. What can I possibly do here to take a short imagine if the market does this generates liquidity comes up again lacks
[17:33] same thing an area in which we expect to reject a confident draw on liquidity. wait for manipulation in the opposing direction of the draw and then I look to take a short somewhere here. Really all of this is is the relationship between
[17:48] liquidity. Where does the market want to draw to? Sellside side, buy side. Then wants to draw to, how are fair value gaps getting respected or disrespected? frame. Hey, there's buy side resting above us. I know just by looking at this
[18:04] right? There's buy side resting above us. So, I'm expecting and looking, right? I'm being reaction. I don't know if this F value gap is going to hold manipulation and then a continuation. Right? So, I'm going to show you a trade
[18:18] that I took yesterday that is the exact epitome of this. All right, I want you focus up what's going on here. Bigger time frame, 1 hour fair value gap or 30-minut fair value gap, right? See this big imbalance candle high, candle low,
[18:31] holding. What happens in this fair value gap? Sellside gets taken. Boom. Low, bang, taken. Lack of displacement. We are not breaking through this low. We are sweeping it. What is the next thing I'm looking for? displacement up. Boom.
[18:45] Right here, bank. We displace up and we close above the down close candle. What is above us? Buy side liquidity. So, keep in mind my bias now going into the when I'm going in open? What am I looking for? Manipulation lower to then
[18:59] bigger time frame is telling me I need to be bullish. So, what happens here? We happened in the morning? Well, we ended up taking this buy side. We're now generating all of this buy side. This is going to be my highs. And again going to
[19:12] keep and look what is the sessions where are we going first we're coming back down to the Londons so market sells boom low gets taken what happens here dial in this low gets taken what do we do displace
[19:26] rebalance respect it go lower now what low gets taken we do not displace we are sweeping it so what am I looking for a close above the down close candle
[19:39] wait boom we close above of it. I take a long and keep in mind I took this live. I'll put the execution somewhere on the chart. I took this live with my is the trade I actually took. And then what am I doing? I'm targeting buy side
[19:53] liquidity. So again, lack displacement lower close above. There's a reason for time frame, we're in the 1 hour. We're sweeping internal liquidity. For the But I have an idea that the market wants to go higher because there's buy side
[20:07] following me because the people that are following me, you guys are gonna [\h__\h] brain here. And then guess what? We come back down. Rebalance. Boom. And then we run buy side. Not just do we run buy side. We continue towards the external
[20:20] draw and we go take the external draw. So I'm aligning the internal model with the external model. I'm saying, hey, this is bullish. And guess what's also bullish? When I zoom in and I see sellside taken and there's buy side
[20:33] resting above. Are we starting to understand here? If I take a square, I could say, "Hey, man, there's four squares inside of this square." And I'm going to say, "Yeah, it is." Because a square, I could say, "This square is
[20:45] made up of four squares." And in that square, it's made up of another four is. It's models inside of models inside of models. If I have an idea of what the bias is on the 1 hour time frame, and I say there's buy side liquidity resting
[20:58] here on the 1 hour, I zoom in and then I take the exact same thing targeting the external model. Do we understand this? Maybe. If you don't, keep searching for Go back, watch this video, look in the market, and see how this works. So, how
[21:12] you are already following along and you're kind of getting how we put it all together. But there's three things here. There's liquidity, right? So, where is the market going? Where's the liquidity? Where is the manipulation? And then we
[21:25] look for displacement. So, again, if I was to draw this out, super simple. We need to understand where liquidity is resting. Now, if the market looks like resting. Now, if the market looks like this,
[21:39] ass. This is terrible market conditions. So, let's give us a good example. All right. So, let's say our bigger time frame here is a total bearish trend, right? So, what ended up happening here, we came up, took this recent high, came
[21:51] there might be a potential that we go higher, but you know, we just took this completely sweep this or we want to maybe rebalance and go back lower. I see? We want to see clear manipulation and clear structure. So now let's watch
[22:05] this and say okay well for me to be really bullish here I would need to get above this high because there's not really any manipulation like yet right because then this is the signature in price right high low lack displacement
[22:17] point would I know so it's kind of hard right so maybe we do this and maybe we you know consolidate a little bit we manipulate and then we have this ooh wait a second now we have something now I can say there's buy side resting above
[22:32] I can say there's buy side resting above here and let's Now also say on the bigger time frame there's a bullish firi gap here. Oh. Oh more context now. Wait gap here. Oh. Oh more context now. Wait a second. More context now. So now we
[22:46] have where's liquidity? I know liquidity is resting here. I know all of these internal highs right now. What? Manipulation. Have we manipulated? Yes. Lows generated. Lack displacement.
[22:59] Breakup structure. Last thing is what? Displacement. Which is what? my breakout structure, right? Displacement back in the direction of the draw. So then we get above this high and this is where we'll most likely start to see a
[23:14] come back down, take this internal low and then we continue the trend, right? the low. But this is basically how the market moves. We have generating a liquidity, we have manipulation, we have a break to the upside and we have a
[23:28] that's pretty much all you need. Start viewing the market in terms of terms of displacement, and you will find yourself taking better setups and having market is actually doing. These are the core smart money concepts that actually
[23:43] matter. The key is understanding how to put this all together, not just have liquidity analysis with market structure, with displacement and manipulation, that is when you actually start trading like a professional. Focus
[23:55] on mastering these concepts instead of jumping to the next shiny strategy, and helped you understand smart money concepts, let me know in the comments. And I will see you guys in the next video.