The Truth Behind Liquidity

What's going on guys? In this video, I

will be diving into liquidity in depth

because most traders think they

understand liquidity, but in reality,

they look at the markets as patterns and

this is the main reason why most traders

keep losing and why they end up on the

wrong side of the markets. So to truly

understand liquidity means knowing where

buyers and sellers are getting induced

and where they're getting trapped. Okay.

So what do I mean by all this? Well,

because most traders look at structure,

okay? They trade with structure or they

look at the market as patterns. Uh

you'll see the market do certain things

to induce traders. Okay? So to

understand liquidity you need to

understand where buyers and sellers are

getting induced. All right let's go into

the charts and look at or follow

liquidity and where buyers or sellers

are getting induced. Okay.

So over here you can see the market is

moving to the upside. Okay. Comes lower

takes out this low over here inducing

some sellers into the market. Okay. And

then the market moves to the upside,

pumps into this high over here where

sellers are trying to sell. And what

ends up happening, you'll see some sort

of reactions from there, okay? Possibly

taking out some low to the left, right?

Internal low and then moving to the

upside and finally trapping the sellers.

Okay? And then once sellers are trapped,

you'll see that the actual move happens

after sellers are trapped, which

happened right there. Coming lower,

taking out this and coming into this low

over here. Okay. Now, why is this low

over here important? Well,

because we got this happening right

here. We got structural liquidity below

here. Okay.

So what ends up happening is the market

comes below, respects this low over here

and moves away. Moving away because you

have to understand there's buyers and

sellers on both sides, right? So you

have buyers trying to buy because that

high was taken out and this is just a

pullback for them to buy, right? And

then you have sellers that are trying to

sell because of this breakup structure

right here. Okay, that market structural

shift or breakup structure. Now that the

move happened, right, this move lower

happened, sellers need to get trapped

again, right? So you got buyers over

here that get induced by possibly taking

on this high or even taking out this

high. Right? So now you'll see the

market come here, respect this high over

here, come lower, take out this internal

low, induce sellers or early sellers.

And then you'll see that move up trap

the sellers and then you can see the

move lower towards the lows, right? And

ultimately well towards this low and

ultimately this low over here.

Okay. Also coming into this low over

here, you'll see the market move like

this. This sluggish price action

basically that buildup. See that move

away inducing

sellers and that move up trapping the

sellers and then the move happens.

Right? So it's very simple. You just

have to see it and understand it. So

let's say we have this as our target.

Okay? We want the market this right here

as our target. We want the market here.

Why? Because we got structural liquidity

below here. Right? So we got this move

up inducing

buyers comes lower respects the low. So

letting uh respecting the low building

that liquidity below

here. So now if we want to be targeting

this low because now there's liquidity

there. All we have to do is wait for

early sellers to get trapped, right? And

as I mentioned, you got early sellers

trapped over here. The move happens,

right? And then comes again trapping

early sellers right example this high

being respecting this high. So now boom

that's the move

right and then you can see here does the

exact same thing moves lower induces

sellers traps the sellers and then has

the move. Okay. And the market does that

over and over again. Right? So if you

just understand where that's happening

or understand where buyers and sellers

are getting induced, it is going to be a

lot easier to be on the right side of

the

market. So example, right, the market

comes lower, takes out this liquidity

over here and then comes up, builds more

liquidity to the upside, moves lower.

Okay? And then same thing,

right? You get that move up, taking out

this high, inducing some sort of buyers

into the market. Okay. And you'll see,

you know, takes out the high, comes,

respects the low. Okay. Moves higher,

breaks this high, come pulls back,

respects the low, moves higher, right?

Just inducing traders, right? Inducing

buyers. You got that order flow and the

market comes, takes out all that

liquidity, and then starts moving to the

upside. Okay, same thing goes here.

Okay, we got this high over here.

intact, right? We have the market coming

into that high. Okay. And understanding

that this overall low being taken out,

right? On like let's say on the 1 hour

or the 4 hour induces some sort of

traders, right? So that could have been

the break of structure on the higher

time frame to induce sellers, right? So

understanding this market structural

shift or break of structure or whatever

um induced sellers already now right all

these

highs basically going to be false right

all these

highs

false false POIs right the areas that

people are going to be looking for that

market structural shift or whatever and

try to uh short Okay. So, you'll see the

market move to the upside, build some

sort of structure. Okay. And over here,

you can see it's very simple. Um, you

got that structural liquidity over here,

moves away. Okay. Take out the high.

Okay. Finally, you get that move down,

clearing this low over here, inducing

sellers, also taking out all this over

here as well, inducing some sort of

sellers. And you'll see the move that

happens over here is very sharp right

and do it does that because right it

needs to induce sellers. So when they

see this move down it's very very

impulsive they're going

to emotionally think okay you know what

the market should continue going lower

right and then what you'll see is the

market start moving to the upside right

and ultimately come for that high. Okay.

Now, if you replicate that on lower time

frames, right? And we look at this whole

area right

here. Okay. Looking at that area on the

lower time frames, you'll see same

thing, right? Same thing internally,

right? You got that move lower. Okay?

Inducing sellers. Market pulls back into

this high over here. Okay? You'll see

that sharp move down, clearing this

internal, inducing more sellers. Then

you'll see that pullback into this area.

And you'll see that little sluggish or

that slow price action right here just

letting sellers get into their

positions, right? And giving like false

reactions and then ultimately coming for

that liquidity to the upside. So all you

have to do is really understand where

buyers and sellers are getting induced.

Okay, let's break down this area right

here. Okay, so we get that move up. You

can see over here prints a low, prints a

high, right? Inducing buyers. buyers get

trapped and then that move away. Okay?

Takes out the high, leaves this low

right here, moves away, break of

structure, pulls back into this low. Now

you got that structural liquidity, okay?

And then you got that move away with

that break of structure. So now

trap any reactions from there, this

whole area should be a trap. You'll

move, you'll see the market move lower,

taking out that structural liquidity.

And then if you look at the um the

previous video I made about high

probability POIs talked about this would

be a high probability POI and you'll see

the market come into it and then finally

move away. So, um, if you follow along

the liquidity, you'll see a move higher.

Okay, printing a

low, moving away, and then you'll see

move lower, right? Basically taking out

some sort of high, inducing some sort of

buyers, coming to trap the buyers, and

then moving away,

right? Ultimately coming for these

highs. Same thing over and over again,

right? Okay, you got that move up B to

the upside coming back leaving liquidity

here. Okay, building that liquidity. So

just because this BOS to the upside

happened it doesn't mean the market

needs to come back right but when it

does now it's leaving liquidity below

here that move away taking out some

internal okay inducing some sort of

buyers and then you get that move

down trapping the buyers and then

finally that move up right so all you

have to do is follow where the liquidity

is by understanding where buyers buyers

and sellers are getting induced and

where they're getting trapped. Okay. So

once you understand that you can

formulate a direction or a um where the

liquidity is and where it should be

going towards next. So um that is the

end of the video. I hope you guys

understood it. You guys are able to

follow along and we are opening up our

mentorship soon. So, if you guys want to

better understand how we trade and how

we're able to be profitable from the

markets, click the link below in the

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