Overview
This session introduces a practical trading strategy centered on liquidity, market structure, and the behaviors of large market participants ("big money"), providing personal insights and actionable steps for retail traders to improve their trade entries and risk management.
Understanding Liquidity and Market Behavior
- Many retail traders experience stop-loss hits before price reverses in their predicted direction.
- The market is not manipulated by individuals, but operates on principles of liquidity.
- Liquidity zones are areas with many pending orders, often targeted by large traders to fill positions.
- Stop-losses placed in obvious locations become liquidity targets for big money.
- Success increases by understanding where the majority places stops and anticipating liquidity sweeps.
Market Structure: Break of Structure and Supply/Demand Zones
- Market structure is identified by higher highs/lows (uptrend) or lower highs/lows (downtrend).
- Break of structure (BOS) signals a continuation or start of a new trend by large players.
- Supply and demand zones are created before significant price moves, marking where big money enters.
- Demand zone: last quiet candle before a strong upward move; supply zone: before sharp downward move.
- Mark these zones using chart tools for consistent trade setups.
Identifying and Using Liquidity Zones
- Common liquidity zones: below double/triple bottoms, well-tested support/resistance, and obvious price levels.
- Big traders push price through these areas to trigger stop-losses and gather liquidity for entries.
- Instead of entering at perceived support, wait for liquidity sweeps and observe reactions in supply/demand zones.
- Only enter after price returns from a liquidity sweep and shows strong reaction.
Entry and Trade Management Strategy
- Enter using limit orders at the top of the demand zone or bottom of the supply zone.
- Place stop-loss slightly beyond the zone to avoid predictable stop hunts.
- Take profit at double the stop-loss risk or at the next clear structure point.
- Only place orders if all three conditions are met: a clear BOS, validated zone, and nearby liquidity sweep.
- Avoid emotional or impulsive trading; focus on systematized, probability-driven decisions.
Managing Losses and Improving Discipline
- Accept that not all trades will win; aim for positive expectancy over time.
- Don't move stops too close or chase price; allow planned setups to play out.
- Review losing trades to identify if stops were placed in predictable liquidity zones.
- Repeated practice and discipline reveal recurring patterns and reduce emotional decision-making.
Personal Reflection and Encouragement
- The presenter shares personal losses and frustration before adopting the liquidity strategy.
- Adopting this approach led to greater confidence, reduced emotional trading, and improved results.
- View losses as learning opportunities and focus on strategy mastery through patience and consistent practice.
- Encourages traders to adopt a new perspective, respect the process, and share their experiences for community growth.
Recommendations / Advice
- Study market structure and liquidity rather than relying solely on candlestick signals.
- Place stops away from obvious liquidity pools to reduce being stopped out unnecessarily.
- Follow a clear, rule-based strategy and avoid trading based on feelings or crowd behavior.
- Practice patience and manage risk, knowing the outcome of any single trade can't be controlled, but entry quality can.
Action Items
- TBD – Viewer: Review personal trades for patterns of stop-loss placement in high-liquidity zones.
- TBD – Viewer: Practice marking supply and demand zones and identifying BOS on charts.
- TBD – Viewer: Apply the discussed limit order strategy with disciplined stop-loss and target placement.
- TBD – Presenter: Release additional advanced videos and real-life examples for further learning.