Transcript for:
Liquidity and Market Structure in Trading

Liquidity where the masses fall and the big money flows. Silent Trading welcomes you all. Have you ever wondered why the market keeps hitting your stop loss and then the price turns around and goes in the direction you predicted? I have done this many times and every time I get stopped out right before the price bounces back, I sit there staring at the screen wondering what is going on. I started wondering if the market was playing tricks on me? There was a time when I believed that the market was controlled by someone . I call them rich people. People who see all the stop losses of small traders like me and just scan them and everyone loses everything, while they leisurely collect goods. I started looking into it. I read books, looked at charts, and studied every time I lost. And then I realized there was no foul play, it was the rules of liquidity. Liquidity sounds technical but is actually very close. It is simply a place where there are many orders waiting to be matched. And especially stop losses are delicious baits for people with large capital. Because in order for them to enter a large buying and selling position , they need a counter-buyer or seller. And your stop loss order is their liquidity provider . Hearing this, you begin to understand why the price often hits your stop loss and then reverses. It 's not that you're wrong, it's that you're entering like the majority and your stop loss is in a place that's too predictable. The story started to change when I learned about liquidity strategy. A strategy built on understanding the laws of large money movements and especially knowing how to enter orders after the price has swept away the crowd's liquidity . If you ever get tired of being almost right but still wrong, this video is for you. I will guide you through this strategy in a very simple way, not theoretical but practical. Step by step so you can apply it right away on a real chart. And the best thing, you don't need a huge capital. I started it with an account of just a few hundred dollars and just found the right setup every day. I can make from 50 to 500 dollars profit. This strategy is not the holy grail, but if you understand it and you are disciplined, it can be the key to unlocking the way a pro plays. In this video, I'll break down the strategy into four clear steps. From how to detect structural breakdowns to how to identify supply and demand zones, find out where liquidity is, and finally how to place orders according to the big money flow scenario. I will also guide you through the advanced version where liquidity is hidden in the secondary supply and demand zones, something more subtle but even more effective than the basic version. We will go through each real example, each candle, each price zone, so that you understand the essence, not just learn by rote. And if you are patient enough to watch it all, I believe you will no longer look at the chart the same way. Ready? Now we start with the body, the breakdown structure and the supply and demand zones. The first footprint of big money, every journey begins with a first step . And in the journey of applying a liquidity strategy, the first step is to understand the market structure and know how to identify the signs of big money starting to act. I used to be someone who entered orders just because the support price or because it bounced several times , probably this time too. But the more I fight, the more I lose. Not because I was unlucky but because I didn't know who I was following and why the price was moving like that. One day, during a sharing session with a teacher, he said something that made me speechless. Price does not move by itself, it reflects the action of money flow. If you don't know who is pushing the price and what they are doing, you are just guessing. And that was the first time I learned about break of structure. Imagine the market as a train. As the train flows, it leaves traces of every stretch of road, every bend, every forest station. In the price chart, that train is the big money flow and the traces they leave are the price peaks and bottoms. In an uptrend, prices often make a series of higher lows and higher highs. Conversely, in a downtrend we see a series of lower peaks and lower bottoms. When price breaks above the old high and makes a new higher high , it is a break of bullish structure. Conversely, when the price breaks the old bottom and creates a new lower bottom, it is a bearish breakout structure . Why is this important? Because it is a clear signal that big money is continuing the trend or starting a new trend. They do not enter orders on hunches. They need to break important price zones to confirm that they can take the price further. And it is at the moment when the break of structure occurs that we have the basis to determine where the real supply and demand zone is . Now I'm going to talk about supply and demand zones but don't think it's complicated. It's simply where the big money starts to move. Imagine you see a sharp increase that lasts dozens of pips in just a few candles. Before that surge began, there was a moment when the market was almost silent and it was there that big money quietly gathered buy orders and pushed the price up strongly. That place is called the demand zone. Same before a sharp drop where price starts to collapse. That is the supply zone. So how to identify it? You need to do two steps correctly. A structural breakout point identification means seeing where price broke the previous top or bottom . Two look for the last candle before the sharp surge that led to the breakout. That candle or small candle cluster is where the big money placed its first position. Once found, use the rectangle tool on trading view or other platform to mark the price range from the bottom to the top of that candle if it is a demand zone or from the top to the bottom if it is a supply zone. I often call it the golden box. Because if you wait patiently for the price to come back there, you will see magic happen. Prices often bounce very strongly and decisively from this zone if the liquidity scenario is reasonable. Once I checked the USJP pair on the 15 minute chart, I saw the price broke the old peak creating a clear breakout structure. Looking back, I see a small bearish candle right before that big spike. I draw the demand zone from the bottom to the top of that candle. After a few hours, the price returned to test that exact area without breaking down and bounced back strongly. I made almost 3 in a single bounce. At that time I understood that the market does not run randomly, it returns to the starting point to gather more energy before continuing. And from then on, my first step every time I opened my chart was no longer to look for candlestick signals, but to look for where the structure had just broken and where the big money started. Because if you know where they depart from, you 'll know where they return to refuel. And that's how I entered the world of big money. by reading the first footprints they left behind. Liquidity where the masses fall and the big money flows. When I began to understand market structure and supply and demand zones, I thought I had an epiphany. I started drawing boxes, marking areas, defining break up structures. And indeed, the win rate increased. But then there were the commands that broke me. The price almost touched the demand zone and broke through, my stop loss was triggered. I looked at the price in pain then it shot up like a bullet. Right in the direction I predicted. It's just a pity I'm no longer in command. After a few times like that, I felt confused. I did the technique right, the bridge area was drawn correctly, the breakup structure was clear but I still got kicked. And then I discovered the missing piece of the puzzle. Liquidity. Liquidity simply put is where the market has a lot of open orders. That place is prey for giants. And the irony is that 99% of retail traders like us place our stop losses in the same places. Consider a very familiar example. Price forms a double bottom pattern. You see the support zone, you see the candle rejecting the price, you enter a buy order and you place a stop loss just below the nearest low. Right? Because it's a safety rule. Every book teaches that. But the problem is everyone does it. The moment you place your stop loss below the bottom, thousands of others do the same. And now what do you think is under that bottom area? That's a huge liquidity pool. The big traders, the ones who control the big waves of the market, they don't look at charts like you do. They don't enter because of a nice pin bar or engolfing tool. They look to see where there are a lot of back orders, where there is liquidity, where they can fill large positions without causing the price to slip too far. So they push the price through the bottom barrel, just enough to trigger all the stop losses. And those stop losses become market sell orders that provide liquidity to buyers. That is, when you sell and get stopped, they buy. Once they have gathered enough, they do not let the price stay in that area for long. They push the price up and you who just got kicked out of the order stand there in pain. I reviewed my losing trades and discovered a painful truth. Most of my stops are right where liquidity is high and the dips are just to serve the real rally. From then on I changed my mindset instead of asking where the support zone is. I started asking if this place was liquid enough for big money to be interested? Do they scan before actually pushing the price? And I started learning how to find liquidity intentionally. Here are some easy to spot signs of a liquidity zone. Double bottom, triple bottom pattern. Many people place stop loss below the bottom. The more times the zone is rejected, the more times the price touches and bounces. The more traders trust, the more stop losses accumulate. The price range is so clear, the places are so beautiful that everyone can see. Usually the place where the tooth is trapped. Once you identify a liquidity zone , you don't enter orders there anymore. You wait for the price to sweep down, break that zone slightly and then observe the reaction in the supply and demand zone behind. That's when you enter the order. For example on the 15 min AUS chart I see a clear demand zone. The start of the rally leads to a break of structure. Above it is a very clear liquid double bottom pattern. I don't enter the order when the price hits that level. I waited for the price to sweep down below, trigger all the crowd's stop losses, and then bounce back up from the bull zone. At that time I placed limit buy at the peak of the demand zone SL was a little lower, T4 doubled. The result was a decisive shot that hit TP in just 45 minutes. Understanding liquidity was the biggest turning point in my trading journey. It gave me a completely different perspective on the chart. It helps me understand why I am right but still lose. And most importantly, it helped me stop acting like a herd and start thinking like an adult. If you have ever been stopped out in a bad way, don't blame the market. Maybe you are placing your stop loss right where the big money is waiting for you. If you have heard this far and this story touches you, don't forget to like to share the value together. If you think someone needs to hear this, please share so they don't get lost. Thank you very much. How big money flows after scanning the map. So now you know how to identify Break of Structure, have found the supply and demand zones and know where liquidity usually lies. Now comes the part that most traders look forward to entering the trade. But this is also the part most people get wrong. Because as soon as they see the price touch the demand zone or break the liquidity, they rush in and forget one important thing. This strategy is only effective when three conditions converge. I repeat because it is extremely important. There is a clear break of structure, there is a reasonable supply and demand zone, there is liquidity nearby being swept. If one of the three is missing, you do not place an order. Imagine you are hunting, if the prey is not out, your gun will still lie still. Now let's talk about how to enter the order correctly. We use a very simple tool, limit order. Specifically, if you are looking for a long opportunity, you would place a limit buy at the top of the demand zone. Stop loss placed slightly below the bottom of the demand zone. Take profit can be double the SL risk reward distance or at the nearest peak you observe. The reason for using limit orders is because you are not chasing the price. You wait for the price to scan liquidity, touch the demand zone and then automatically match the order. You don't need to sit and watch, don't need to guess the reversal candle, don't need to enter manually. In real life, I have used this method on both forest and crypto. For example, once trading with itd, I found the model quite standard. Breakup structure is very clear on the 15 minute time frame. The demand zone is located in the small candle cluster before the strong push. Above the demand zone is a double bottom pattern. There is a lot of liquidity built up. I don't rush into an order when I see a rejection candle. I set limit buy in the crane zone. SL set lower than 10$. The order was doubled, the price broke through the two-point pattern, swept down to the demand zone, matched the order, then bounced strongly and hit the street in less than an hour. And the best part? I don't need to do anything. Everything was planned in advance. Now let's talk more about take profit and order management. Many people enter at the right time but still do not make a profit because they take profits randomly or leave their stop at the wrong place. My rule is if the market is moving fast, I let it touch and don't interfere. If the market is slow I can leave SL to break even after price goes more than 1 inch. Never pull your stop too close because you are killing your good orders and especially I don't expect every order to win. This strategy does not promise 100% wins but it has a positive expectancy if you do it correctly and consistently. Let's say you lose five trades, losing one on each trade. You win three orders, each order wins 2, the result is a loss of 5R, a win of 6R, you still make a profit. That 's why I say, play by probability, not by emotion. Sometimes you will see the market go straight without clearing liquidity, okay, ignore it. Sometimes the demand zone cannot be maintained, the price breaks out, it's okay, cut loss. Don't try to save the order, don't try to remove it. Just do one thing, repeat a system with good probability. If you practice enough, you will start to see repeating patterns. And then you don't need to guess the market anymore. You just need to be patient and do exactly what is written. I know the feeling of excitement when preparing to place an order, but I also know the feeling of confidence and calm when I know I am not entering because I feel right but because the structure, liquidity, and price range are in sync. And once you go through a few successful swings that way, you'll start to understand that the market isn't chaotic, you just haven't figured out its language yet. If you're ready to look at charts with a different set of eyes, then in the final section I'll tell you how this strategy changed the way I trade, as well as a message specifically for you, the person looking for a truly clear direction . Once you read the footprints of big money, you are no longer walking in the dark once and for all. I woke up at 3:00 am, staring at the chart, my hand clutching the mouse. That's the last order of the week. I lost three orders in a row before that. And this time I told myself I could n't be wrong anymore. I see a double bottom pattern. I saw the engolfing candle bounce from the support zone and I entered the order. The price bounced a bit and then broke down right where I believed it was solid. And then I got kicked out of the market. Just a few minutes later, you know what happened? Price bounced back strongly, going exactly as I had originally predicted. It's just a pity I'm not in it anymore. I sat there, speechless. And I realized the problem wasn't that I was going in the wrong direction. The problem is that I'm still acting like the crowd. I didn't really understand how the market worked and that's what led me to the liquidity strategy. Throughout this video, I have shared with you my entire approach to the market every day. I am not looking for a buy point. I look for big money action, I don't guess prices. I wait for the market structure to give me a clear signal. I don't enter orders because I feel like I'm waiting for liquidity to be swept away before entering with the flow. It all starts with understanding one very simple thing. Price does not move randomly but it is pulled by those who have the power to move it. and their footprints are the structural breaks of deep supply and demand zones in the chart and especially the stop hunt liquidity sweeps where 99% are eliminated from the game so that the remaining m% can move on. I do not promise you that this strategy will bring instant profit I do not promise that you will win from the first order. But I can honestly say that this is the first strategy that makes me feel like I'm playing by the rules. I no longer walk in the dark, no longer guess, no longer led by emotions . And if you're also looking for a clearer, more systematic path, I hope this video has planted a seed for you . The seed of a different perspective, the seed of the art of reading big money. I am not a genius. I am just a few steps ahead. I have also lost, been desperate, and cried in front of the chart. And I understand that feeling very well. But I also know that if you are patient enough, if you practice the right things, if you dare to abandon your old way of thinking and learn from the beginning, you can completely change the results you get. If you made it this far, I am truly grateful because it means you are serious about this trading path and you are showing respect for yourself and the work I have shared. Please leave a comment below if you found this strategy helpful or tell me your story. Because who knows, I might make a video explaining the exact situation you're stuck in. If you want to learn more about advanced liquidity analysis, please subscribe to the channel and turn on the notification bell. I will be releasing more real life videos from examples on specific currency pairs to analysis of stop loss phakts and how you can build your own system from this strategy. Remember in the market no one can control the outcome of each order but you can completely control how you enter the order. And if you act like the 1%, you will start getting different results than the 99%. Thank you for watching until the end of the video. Be patient, practice and believe in the path you choose. Because traders are not quick winners but people who don't give up and improve every day. See you in the next video. [music]