Master Liquidity Concepts (Mechanical Strategy)

[00:02] will drastically boost your win rate find big riskable trades and Bank consistent profits in this video I will share a few critical points about they just draw liquidity all over their charts and they say you know this is why

[00:15] price went Here There and Everywhere and it's just super discretionary and pretty useless they don't give you a repeatable and systematic process that you need to use in your trading they draw all of these fancy liquidity schematics but on

[00:27] their own let's be honest do they actually help you make money no consistent actions equals consistent results you are just pissing in the wind rely on so I'm going to strip away all of the noise and show you what actually

[00:41] matters in this video we will cover the critical rules that have now helped countless of our members get funded and Bank their first ever profit splits by so this video is going to explain my overall trading strategy what is

[00:54] liquidity how to mechanically identify liquidity pools how to spot institutional training acity liquidity inducement how to trade high probability liquidity zones how to avoid liquidity traps so you can start taking advantage

[01:07] of them instead and how to enter and exit from Maximum profit high and low resistance liquidity and the advanced liquidity cycle so before we dive into the specifics of the liquidity Concepts first you need to understand my overall

[01:20] strategy philosophy so my entire technical strategy is based around the idea of trying to identify where the big money is entering and exiting the market and then trying to trade in line with that so first I use Market structure and

[01:33] that gives me my directional bias once I know the direction I want to trade in I me locate where I'm going to enter that trade idea and then finally I use liquidity to help me time and refine that idea so I essentially use three

[01:46] main time frames my higher time frame my medium time frame and my lower time frame with my higher time frame I just want to know are we currently in the pr Trend run phase or are we in the higher time frame pullback phase okay that's it

[01:59] step two my medium time frame I want to know where is my immediate directional know where is my immediate directional bias so if my M15 chart is bearish that is the direction I want to trade in for the session and also that is the time

[02:11] frame I use for my zones for my pois okay so my medium time frame gives me me gives me my immediate directional bias and the zones are where I need to trade from Once I have my directional bias so I.E the higher time frame pull back is

[02:25] complete my median time frame has now shifted bullish therefore the higher time frame pull back is now finished so now I want to follow the bullish medium time frame until it takes out the high time frame week high okay now if you

[02:38] Market structure supply and demand and my entire strategy building it from the ground up click the link in the bio and we have a full free training video from end to end including how to build a trade plan back testing Market phases

[02:53] there it's completely free and you'll take a ton of value from it so once you've identified your directional bias so the M15 is now bullish we want to be looking for catching that higher low to now Target the continued bullish move

[03:06] High okay we have our supply and demand zones and now we use our liquidity Concepts to refine those zones and to know what requirements we need to see when price gets there to increase our strike rate to increase our risk reward

[03:20] so that's what we're going to cover in this lesson today so what actually is liquidity well in its most simple terms liquidity is just how much supply and demand there is in a market at every price level on the left here we have a

[03:32] every single price level there is a lot of volume on both sides of the market whereas in an IL liquid Market there isn't right there's a lot less volume at each price level some price levels there might not be any volume right now in

[03:46] trading every time you take a trade there must be an equal and opposite order for you to transact with otherwise a trade can't take place so if you're you're a big guy right I mean these are madeup numbers but imagine you're

[03:59] putting a lot of volume through the market and you want to buy $700,000 worth of whatever the asset this is but there's only $500,000 at the current ask price if you buy that price is going to have to shoot all the way up to this

[04:13] price level to completely fill your order right so in an IL liquid Market quicker and that means that if you're a big guy and you're getting involved because your order is not going to get filled up all the way up here when

[04:27] current market price PR so before we're about to dive into kind of these fancy technical liquidity Concepts get your head around this the big guys need a ton of opposing liquidity for them to trade against in order to reduce the amount of

[04:41] slippage they will get in the market okay so this is a massive clue of now what we need to try and identify on our charts to look for where are these big liquidity pools going to be so if you look at any Candlestick chart right at

[04:53] every single price level here there's going to be a ton of supply and demand on either side of the market Okay so how do we now refine that to identify where the big pools of liquidity are going to be where institutions can potentially be

[05:05] looking to trade against that so we want to identify the areas on our price charts where we think there is going to be large pools of resting available be large pools of resting available liquidity for institutions to use okay

[05:17] behind every structural high and low in the market now that can come come in many forms as it's shown on the chart here but essentially the more significant that higher low we can assume the more available liquidity

[05:30] there will be behind it now there's a lot of sort of discretionary ways that equal highs and lows you can have you know session range liquidity say with highs and lows right there's lots of different ways that Traders like to use

[05:44] YouTube videos Traders will just draw liquidity everywhere now whilst that might be factually true how does it help you with your trading right you want to make it as systematic refined and mechanical as possible so what I would

[05:57] is just focus on something like the Strong high and low concept because this is extremely mechanical and simple to identify now Behind These highs we assume that there is buy side liquidity and Below these lows we assume there is

[06:11] sell-side liquidity okay now why do we get these liquidity pools forming Behind well that's where the concept of inducement comes in so inducement is a thing that persuades or leads someone to do something so in trading what that

[06:26] essentially means is that patterns in the market will encourage enourage Market participants to trade at certain levels and what that does is it generates available liquidity for the big guys to use to fill their positions

[06:39] equal lows in the market these double bottoms what does that form it forms a support level that Traders might want to trade so if they're buying at that place their stop loss they're going to place it below the lows okay so that

[06:52] generates sells side liquidity likewise people might view that double bottom actually as a bare flag and they want to sell the Breakout of that right so more sell-side liquidity generated below those lows or for instance you get a low

[07:05] that breaks a high Traders now see the trend as going to the upside so they now bullish Trend will continue so if they buy there where is a stop loss going to be it's going to be below the low and that generates sell-side liquidity you

[07:17] then get the opposite for those bearish patterns right generating buy side liquidity above the high so again what are we doing here the institutions need opposing liquidity to fill their orders so if you look look for these patterns

[07:30] to appear in areas in your chart where you're expecting a certain direction to you're expecting a certain direction to play out I.E if you identify a high probability Supply Zone and you start to see those structural highs form in front

[07:42] of it then we know there is buy side liquidity right for the big guys to sell against right they need that opposing liquidity to enter the market short with minimal slippage so the key here is identifying inducement that generates

[07:57] the available liquidity for instance ustion to use in front of a POI right holding and for Price playing out in that direction that you're anticipating so this is a powerful concept when you understand it but on its own it's pretty

[08:11] useless like anything in trading you need to combine it with all of your other Confluence to build a portfolio of evidence to take a high probability trade so now we understand what liquidity is where we can find it on our

[08:23] charts why institutions need it but now how can we use all of that to actually make money if I can simplify it for you there's two main ways we use liquidity one is in the past okay so we look for where sweeps have already occurred to

[08:37] signal that institutional activity may have happened there and then we use it for the Future Okay so identifying where is the available liquidity to anticipate if they're going to enter in those same places in the future so the first part

[08:49] and that's where the concept of liquidity sweep zones come into play okay so if you find a supply and demand Zone that to liquidity in the creation of the zone that can signal that there was institutional backing in that zone

[09:04] okay why what is the logic and theory behind this well if we assume that there is buy side liquidity behind a high that means that institutions can use that to sell against right to fill their orders with minimal slippage in the creation of

[09:19] this Zone okay so there different ways in which this uh in which this can form but if we see that zone that took a low right in the creation of that demand Zone that is potentially where being firers have used the sell side liquidity

[09:31] to enter to get in long okay so now you can use this as a filter to look for higher probable zones within your trading now we know that in a bullish Market lows are strong because they create those highs they break structure

[09:44] to the upside now what you will often notice is that those strong lows in a bullish Market are created through sweeps of liquidity why because institutions need the sell side liquidity below those lows in order to

[09:57] fill their long positions to to fuel that next prot Trend run to the upside that every time a swing pullback is complete it happens through a strong liquidation right we take that liquidity in the leg to the left we even get a low

[10:12] generating strong available liquidity below that low the big guys can then use Movement to the upside okay so you can just see it again every low takes liquidity when it's formed again we come down we take liquidity in the formation

[10:26] of the Zone if I zoom in here a bit right sometimes s it's a bit more subtle but we get this Supply to demand flip it takes liquidity to fuel that next move structure we come down grab the liquidity into this POI if we get that

[10:40] next move into the upside and you'll see that time and time again we get the Movement to the upside here we again equal lows into our POI increasing the probability that that next strong piece of structure is going to form rinse and

[10:55] repeat so identifying zones that will form through sweeps of liqu is a great signal that there was institutional involvement there so when zones you want to trade from in the future they are great things to look at

[11:08] so that's looking in the past but now we look into the future and go where is there available liquidity that institutions May potentially use for us to then try and trade in line with that direction let's take a look at that so

[11:21] sweep zones show us potentially where they entered previously the concept of available liquidity is for them to use if they going to enter again okay so if left there's no structural load to the left and if there's no structural lows

[11:36] built to the right there's no available liquidity where is the available liquidity it's going to be behind the Zone itself okay and that's very often when you will see zones fail okay so here in example no liquidity to the left

[11:50] available liquidity for the big guys to use to sell against is behind the POI itself and that's where you see that trap and the zone get swept now on this occasion right the top Zone doesn't have any liquidity to the left and nothing to

[12:05] the right so now the available liquidity is behind that zone and we can use that will be right to get long in that previous Zone and that increases the probability of this being the POI that breaks out okay we can see that here

[12:19] this Zone down here had no liquidity to the left nothing built to the right so that ends up inducing buy side liquidity for the extreme POI that's the one that holds and then we go okay so that's if we have available liquidity to the leg

[12:32] in the left or if there isn't available liquidity in the legs to the left we can see it built to the right okay here no immediate structural low in the leg to the left so we see those clear equal lows that also broke structure built to

[12:44] liquidity for those long positions to be filled or ideally you get it both on the left and on the right and then you get a high probable POI now you need to systemize this you need to know exactly what is mechanical definition for where

[12:59] you can see inducement build okay you need to have mechanical rules for that the legs left how near to your Pei does that need to be you need to have relevant when is it not relevant on what time frames is it relevant for you can

[13:14] you use it on your lower time frame what phases of the market okay these are all systematic as possible and that's what we have done with our trade plans okay know what to do in every scenario and they have exact mechanical rules for

[13:27] justifying every single move in the market inconsistent actions inconsistent results okay we need to systemize it okay so quick example here on the chart right we are clearly in the bearish market now as price is coming into this

[13:42] Zone here what do we notice straight push no liquidity in the leg okay no strong liquidity is built in the right none of these highs break lows so what ends up happening the only available liquidity is behind the Zone itself okay

[13:55] we see this high and this High get swept and eventually that produces enough buy side liquidity okay for the big guys to sell against to fuel that Next Movement structural range to work within okay cool we want to try and capture those

[14:09] shorts we've got one zone here and then the extreme Zone here what do we look liquidity requirements that's a straight push there's no structural High here in the leg nothing is built significant to the right with the rules that we use so

[14:23] behind the Zone itself that ACC as the inducement for the extreme Zone and eventually we get the move that goes to the downside okay and get some corrective Asia price action coming into London next day right let's zoom in we

[14:36] can see here nice supply chain forming but there's no available liity in the leg so what film builds to the right we have a high that breaks a low okay and what does that do that induces buy side liquidity behind that strong high now

[14:49] increasing the probability that there's going to be institutional shorting Movement to the downside okay we're get another break of structure here's our new structural range we're working within okay now we have a Zone here but

[15:02] push here right there's no available liquidity in this leg so what do we need to see we need to see strong liquidity built in the pullback right to increase otherwise where is the available liquidity it's behind the high itself so

[15:18] what ends up happening that high ends up breaking okay and then there's enough fuel to fuel the move to the downside okay no liquidity to the left nothing built to the right that high gets swept now the big guys can get short

[15:31] potentially using that buy side liquidity to fuel that next leg you logic starts to tie together to help you formulate trade ideas to help you expect but again you need to combine this with all of the elements that you

[15:45] use in your trading it is not going to solve your trading on its own so how can we start to take advantage of these concepts with our entry models now time frame analysis and you found a really strong bullish idea okay you have

[15:58] your M15 Zone and now you're on the M5 and you want to look for your entry model okay so entry model one would be you wait for your strong liquidation to occur well what do we have this low here broke this high so it's broken some

[16:11] structure that now gives us strong available sells side liquidity below that low potentially for institutions to use coming into our POI so now we can refine the POI to potentially increase our uh risk to reward right to this Zone

[16:27] Here and Now perhaps you want to set your limit order here and that would be an example of Entry model one okay and you would look for price to tag you in let's see okay and you will now be in the trade okay so that would be how you

[16:41] would approach entry model one entry model two is you're not going to leave wait for the market to start to move back in your favor and this is where you liquidation occurs you Trail them down and you're looking for price to take you

[16:55] mechanical rules on how you do this how do you SI your trade when does the trade idea get invalidated okay you need to know exactly that and also sometimes this liquidation isn't going to be very near your POI so you need to have a

[17:08] mechanical way to decide how near that needs to be okay so that would how you how you do entry model 2 and then you get tagged into the trade okay but again mitigate here and push down lower we don't know that so that's where entry

[17:22] model 3 comes in if you prefer that where you wait for the market to clearly shift okay then we get the movement to the upside so now you would look for price to pull back in in whatever way you want to do that okay so either you

[17:34] Zone some of you might want to use Fibonacci as a case so you would have some of you might you want to use fair value gaps whatever that is this entry confirmation that you get but here's the risk right let's say you're entering on

[17:48] the extreme price doesn't always pull back to tag you in and you can just miss out okay so you need to pick the approach that works best with your psychology and the one that you find you have most success with over time test

[18:01] test and test some more now the concept of high and low resistance liquidity can be really useful just for us to anticipate how price potentially May behave okay so imagine you have a bearish market now when price starts to

[18:14] pull back if you see that it just leaves a lot of corrective lows and there was no liquidity sweep once that pullback forms that's often a very good indication that the overall pullback won't be that deep because Institution

[18:28] have not had the opportunity right to use the cell sign liquidity that's generated below those lows in order to get long and fuel that deeper move so like this price won't pull back that

[18:42] deep and it will come into a less well priced Zone okay and then that's usually if you get like a strong liquidation around this POI you can trade it with more confidence even though there's cause for higher prices because we now

[18:55] the downside right that low resist resistance liquidity whereas if a low resistance liquidity whereas if a low forms with a strong liquidation often not always often that can be a sign right that this move was generated with

[19:10] that strong institutional activity using that sell side liquidity to get long and much deeper pullback and therefore you potentially not trade this POI or to only expect a quick reaction and expect

[19:24] price to come up to those more premium levels before we see that movement there to the downside so in this example we are in a clear bearish Trend we're pretty oversold to the downside now there's no strong liquidation here and

[19:37] price is pulling back pretty correctively okay leaving a lot of rest in liquidity for price to Target now when I see that type of price action we're not going to see a very deep pullback in most occasions right so that

[19:52] with your shorts shorting at more discount prices right now obviously again this concept on its own is not that useful you need to combine it with obviously if we're coming off a beautiful high time frame level things

[20:05] like that then you know use a bit of Common Sense there so we see price start to push to the downside and chop around that low now what happens here okay is we if I zoom in we sweep or not we price sweeps this significant swing low here

[20:21] right and we get a liquidation of that low but what also do we get in the immediate price action this low here broke this high so it's somewhat of a strong low giving us another uh you know inducing even more sell side liquidity

[20:35] below this low and this low here and now if we start to see price shift to the upside we can start to anticipate that institutions are now going to use that to fuel a much deeper pullback okay um and this is just a really good concept

[20:48] that you can use to now anticipate how price is likely to behave right so if you see that you can now obviously see that this is likely going to be a trap and anticipate we can can play a much deeper swing pullback because there is

[21:01] now available liquidity for that to occur so now to bring everything going to look at one of these sort of schematics that was taking the piss out simplify it for you and pay attention to

[21:14] what actually matters in your trading okay so imagine we are in a clear bearish swing Trend really what we want to be doing is trying to capture the shorts here to get that lower high for that next leg right so as price is

[21:27] pulling up to two of our main pois here now we want to be thinking about liquidity okay if there is no available liquidity in the leg to the left we want to see it built to the right none of these highs break structure so we don't

[21:39] have any liquidity Bill okay people might get short here which is fine price taking out this liquidity below these lows okay what is that going to do that's going to induce people to now

[21:51] they've seen that Mitigation Of Supply they've seen structure shots to shift in they're going to want to get short they're going to get short here stop loss is above the highs right so what is that doing it's inducing buy side

[22:04] liquidity above that okay that now institutions can potentially use to get short once price wipes out that liquidity right so all of that liquidity above these equal highs where other people are now selling the double top

[22:19] induced liquidity I get rid of these lines into our extreme level so this can be that first potential entry in which you want to get short okay maybe you so what can you wait for you can wait for Market structure to shift back in

[22:33] your favor okay so now order flow is bearish and now you have a higher probable POI to trade from right obviously there might be multiple pois the left no liquidity to the right where is the available liquidity it's behind

[22:46] the high itself this now becomes a higher probable area to short okay what do you have you've got double bottoms here for liquidity to Target okay because before that what you'll have is people will see this low break this High

[22:59] frame analysis they don't understand what's going on when price then comes what are they doing they're trying to get long okay there's all sorts of can be generated everywhere there's so many different ways you can look at it

[23:12] your head around it what you need to identify is Market structure is giving my me my direction I've got well priced pois I want to trade from but I know the left or to the right before I'm going to get involved and then it's down

[23:27] to you whether want to wait for more Confluence such as waiting for Market okay so there's a lot of different ways you can cut and slice this but we have very very mechanical rules on when we will use liquidity to the left or when

[23:40] we ignore that and we must use it to the right how near it needs to be what we need to see exactly for our entries and when a trade idea is invalidated you so if you want you know we've done all the hard work for you if you want our

[23:53] get it right you can sign up to our community down uh down in the description below but but there is tons of information now in this video to help you think about how to make it mechanical and it's up to you now to use

[24:06] what's what you resonate with test it consistent actions leads to consistent results that's how you will do it so to try and simplify everything and thing you're going to try and remember from this video is that the big guys

[24:20] need opposing liquidity to enter the market with minimal slippage so we want to try and identify where those opposing liquidity pools are going to be for them in the opposite direction of where they want to trade so if you're

[24:33] looking to buy from a demand zone or from a level you want to see that cell side liquidity generated in front of your level to increase the probability that that demand zone or that key level is going to hold and then vice versa for

[24:46] opportunities once you kind of get that logic embedded in your mind then you can start to simplify and form mechanical rules to use that to your advantage use now if you want to learn more about our framework make sure you sign up to

[25:01] will be in the description below the video where we're going to build everything from the ground up take each concept really slowly Market structure supply and demand liquidity Concepts which you've now just learned how to

[25:13] Market phases and all of that good stuff so if you want to get that involved it's going to be an idiot if you don't sign up otherwise let me know in the comments what you thought about this video and I'll see you in the next one cheers guys