this is how to take trades using liquidity hey guys my name is Fabio and in this video I'm going to be showing you exactly how to take trades using liquidity how you can identify liquidity and how to take trades in combination with Supply demand so this video is going to clear everything up for you and let's dive straight in all right so we're here on the daily time frame on nusd and I'm going to help you understand exactly how to take a trade using liquidity but before we dive into identifying liquidity itself we need to understand what the overall Market structure is doing so that we understand if we're looking for a long or a short so what we can see here on our chart was that the market was bullish we had a low a higher high a higher low a higher high and then we flipped bearish in towards the downside after this break of structure so at this point in time we're looking for a short position Now to create our immediate daily bias for the day ahead what you want to do is look at the fractal structure and what I understand from the fractal structure is that this is my fractal high and that this is my fractal low this is my fractal High because it broke structure over here and if you dive into the 4our time frame it will become more clear because on the 4H hour time frame what you can see as well is that the overall Market structure is bearish in towards the downside so we have a break of structure we have another break of structure and we have another break of structure so here on the 4our time frame as well lower low lower low lower high lower high lower low so obviously now once again we're expecting to create a new lower high and push down lower to create a new lower low so with all of the market structure understanding we can then dive into towards the one 1 hour time frame and look for a valid setup so what I want you to understand that in trading there are several ways to identify liquidity so the main two forms of liquidity that I'm going to be teaching you in this video are one range liquidity where you have an area of consolidation and above or below the range that is where liquidity lies and number two swing high and swing low liquidity where we expect there to be liquidity above the swing high or below the swing low liquidity very simply explained is where we expect in the market Market to be stop losses placed and once those stop losses are grabbed we expect a reversal in the opposite direction all right so we understand that the overall Market structure here is bearish on ND USD this is your high this is your low and now obviously we're looking to see another push in towards downside now when it comes to identifying those two forms of liquidity what we want to look for first of all is the so-called range liquidity so what we have over here is an area of consolidation and all you simply want to do is draw out the swing high and then look for a a grab of liquidity above that high and then a reversal in the opposite direction this to me confirmed that liquidity has already been grabbed above these highs and that the market does not necessarily need to return to those highs before dropping down lower next once again what we have here on our immediate bias or within our immediate proximity of the trade itself is that we can identify once again an area of consolidation so once again identify the overall swing high of that range and what you can very clearly see is that the market Market grabs liquidity above the high as we can see over here and then reverses in towards the downside providing us with a very sustainable break in towards the downside so at this point in time the 15-minute time frame for me is bearish this is my high this is my low and once again I'm looking for a potential short position now in order to take a valid short you need a few confluences so we always need one supply and demand as we can see over here we have an area of Supply this is a supply Zone because this is your buy up for a strong sell down that broke Market structure number two you need premium versus discount as you can see over here we made a valid retracement into premium premium is everything above the 0.5 FIB number three we need liquidity well as we can see on the 15-minute time frame we had an area of consolidation and as you can see we grabbed liquidity above the range and now we're reversing in towards the downside now number four is that we need a valid Market structure well obviously here on the daily time frame as explained we have valid Market structure and on the 1 hour and the 4 Hour and even the 15-minute time frame as well we also have valid Market structure because we are bearish from this high in towards this low and at this point in time we've also seen a bearish change of character with this being your change of character high and this being your change of character low so we've come in towards this area of Supply we've seen liquidation above the range we've seen a bearish market structure shift into towards a downside on both the 1 hour and the 15minute time frame so now we are happy to look for a potential short short now when it comes to that final form of liquidity before taking the actual trade itself because in order to validate this area of Supply here which caused the break of structure we need to look for that swing high or That Swing Low liquidity so what I like to see over here is that we have equal highs and as you can see this High over here is positioned directly below this area of Supply when you have an area of liquidity which lies exactly below an area of Supply you can consider this Supply Zone as a very high probability area of Supply furthermore before forming this Supply Zone we grab liquidity above the range and therefore I consider this a double strong zone so what I mean with a double strong zone is that it has both grabbed liquidity when forming and we have liquidity right below the Zone making the Zone extremely strong so in these kind of instances I'm very happy to then simply just take a short as soon as we enter the supply Zone with my stop loss above the high anticipating on the creation of a new lower low furthermore what I want you to understand as well is that next to the fact that we have Supply a bearish market structure and liquidity we also once again here on the 15 minute time frame have Premium versus discount we are currently trading inside premium and therefore this for me is a high probability short now what you see happening is that the market indeed pushes down lower if you were to want a higher probability trade you could have always waited for a simple Market structure shift here by taking out this area of demand as you can see we get the push down we we get another pullback in towards this buy up for the sell down which you could classify as an additional area of supply and on which you could have also placed your entry your stop loss above the supply Zone and then once again as always Target at least a one to free risk to reward and what you'll see is that the market comes back up in towards that Supply Zone pushes down lower and hits RTP for both trades so this is exactly how to enter a position utilizing liquidity if you have any questions as always make sure to let me know in the comment section down below or join the free Discord Link in description as well see you there thanks for watching and have an amazing day thanks guys