Lecture Notes: External and Internal Range Liquidity Model

Key Concepts

• Internal Range Liquidity: Refers to fair value gaps within a range. Examples include bearish and bullish fair value gaps.
• External Range Liquidity: Involves swing highs or swing lows outside the range.
• Price Movement Relationship: Price is expected to oscillate between internal and external range liquidity.
• Trend Shift or Movement: Changes the cycle of oscillation between liquidity ranges.

Process Overview

1. Higher Time Frame Bias

   • Determine if price is expected to move higher or lower.
   • Look for internal range liquidity (fair value gap) or external range liquidity (high/low swing).

2. Lower Time Frame Analysis

   • Look for a stop raid and change in the state of delivery.
   • Target a 2:1 risk-to-reward (2R) trade.
   • Ensure all actions are within a "Kill Zone."

Example Walkthrough

Example 1: Gold on the Weekly Chart

• Higher Time Frame: Weekly chart bias is bullish; anticipating a move to previous week's high.
• 4-Hour Time Frame: Look for displacement towards objective with fair value gap or low sweep.
• 15-Minute Chart: Confirm change in state of delivery; target external range liquidity.

Example 2: Daily Chart Analysis

• Daily Chart: Swept daily low; looking for bullish price movement the following day.
• Hourly Chart: Internal range liquidity is a fair value gap; external range liquidity is identified as highs.
• 5-Minute Chart: Identify change in delivery state; manage entries for 2R target.

Additional Examples

• Higher Lows and Higher Highs

  • In a bullish trend, anticipate higher lows and highs.
  • Use internal to external liquidity transitions to guide trade decisions.

• Retracement Actions

  • Use fair value gaps in a retracement to validate internal range liquidity.
  • Confirm changes in delivery state on lower time frames before entering trades.

Closing Remarks

• This liquidity model is designed to be simple and mechanical.
• For detailed resources, access the PDF available in the provided Discord community.
• Encouragement for further exploration and learning.

---

These notes summarize the key points and processes involved in using the external and internal range liquidity model for trading. The emphasis is on understanding liquidity ranges and executing trades with a clear systematic approach.