so we're first going to cover liquidity and then we'll go into ranges so let's go over the basics types of liquidity we have the eal lows known as the bottoms we have the Eco highs known as double tops we have tra line liquidity and by this it's the retail Trail line the one step by after every break structure Fibonacci all that stuff right EMA Etc then we have highs and lows liquidity that pretty much is liquidity on every high and on every low because there is liquidity on every high and every low in every structure point and then we have SNR liquidity which is support and resistance liquidity that's when the market breaks high or support becomes resistance the breakout Traders pretty much come back tests and it goes this becomes liquidity so these are the main ones the main common ones equal High equal lows TR liquidity structure liquidity and then SNR liquidity support and resistance liquidity right and then we have the ones that I'm going just call Advanced liquidity which would be external liquidity so external liquidity all right that is the end of the range or in other words the high of the range and the low of the range is external liquidity okay is the end of the range the high or the low of the range and then everything inside of the range is known as internal liquidity a internal liquidity everything inside of the range and then we have inducement inducement all right now what is inducement inducement you probably heard it before is a trap okay it is convincing traders to do something it is convincing traders to long it is convincing traders to short let me give you an example if we have a break of this high and then let's say we have a beautiful bullish Eng gulfman candle the retail Traders love this this is their confirmation right they will go along right here so this right here is inducing them to go long long on every pullback bullish engulfment bullish engulfment right the long in eventually price comes to a stopping point which for us is our POI and then what happens it drops and takes them all out so let's explain this in another way it is building up liquidity right right and it would pause before it comes to a point of Interest an area of Interest it won't hit it it'll leave a little Gap all right and then price for example here you see how I broke structure there are sellers coming in the market in here there's sellers coming in the market then what happens is price pushes up up comes into our POI and then that's where we short that is what a inducement is okay it is enducing Traders to do something that is wrong which is a trap right now some people call it a smart money trap I do not believe is it is a smart money trap that's just my opinion right they call it smart money trap because the people that call it that either they don't know how to restructure how to restructure or don't understand what they're doing but who knows all right who knows but in my opinion it's not a smart money trap because now I'm not saying that we're going to know 100% or that I know 100% but it wouldn't be a trap if you were able to understand structure and liquidity if you were able to understand the logic behind it I mean if it's building up orders and there's a POI just above you and we're thinking here logically all right does an inducement there's let's say a POI here it looks so obvious everyone shorts the next thing you know it takes am Mount and drops but what are some signs that could give it away that it's an inducement well one can be something like this right PR right here breakup structure here but look trend line trend line liquidity you are shorting on the third touch like the retail do Fibonacci 61.8 you are shorting what the retail do you are the liquidity if you don't see it then you become it all right so here's where we start to think all right just a little bit logically now this has nothing to do with what I said in the previous video you know trade what you see and you know not what you think by this type of think I'm thinking logically don't think too hard it's in front of your face right it's right there of course I can't blind me if you don't see in the beginning which you with experience all right but I'm just talking in general if this is liquidity and you see it and you got a feeling there's liquidity it's a high chance it is right So eventually you will get signs to let you know that's a trap or an inducement and then it just goes then it drops so that's why I don't believe there's a smart money trap because if you trade quote unquote smart money then you should be where the smart money enters right because the smart money takes out the retail so again I'm not here to argue I'm just here to State my opinions so but does it induc me guys it's trap all right so let's go back to we were that's the inducement right there and that will fall into a point of Interest somewhere in here all right and that get taken all right gets taken and then participating price to come to the external so after we take out external right we're coming back for internal after we take out internal we're going back for external so far with me all right so now let's break that down and we're still in the topic of liquidity just one want to introduce this all right so before we explain that part right there let's introduce the ranges real quick and then we continue from that part because that's the only way it will make sense so okay a strong low is valid when it takes out liquidity takes out liquidity and then it breaks structure okay a strong high is valid when it takes out liquidity and it breaks structure all right simple as that how do you confirm a range a range is confirmed when you have a bullish cim Modo and then the opposite in the other end like this then a range is confirm from A to B okay that is your strong low that for now we'll call it a strong high for now all right that's how you confirm a range so now that we got that out the way let's go back to where we're talking about external and internal so this is external liquidity the red line all right and then everything inside the range is internal the market is going to come after the internal and once the internal is done it's done taken the market has fulfilled its cycle okay it's done so the next Target is going to be a takeout external liquidity so once internal is taken we're going for the external and once external is taken we're coming back for the internal all right now it's not going to look this perfect but this is the cycle of the range it takes out internal then we target external takes out internal Target external after external we target internal okay now why is that why does this work so let's get into some more details all right so what we have our range from A to B right and let's say price came into a strong low so this would be our external and this is the internal so why is this let's think about this in the retail perspective how many Traders retail Traders have sell stops below these lows these lows are protected lows for the retail Traders they're buying the dips they're buying the dips they have their stop loss just below right then we have breakout Traders right here so when price comes down right they're expecting price to keep on dropping they get T in and they keep on dropping they got pending orders right there right sell stops the Market's going to grab them and they reverse because the market doesn't want you to make money it doesn't want you to win so after it takes out this liquidity these Traders so when it takes out all the pie stops what's left all the sell stops that resting above here all these sell stops are resting above here which is in other words liquidity all right because the market already did its part it already took out all of these buyers now we're going after what the sellers now we got to take them out and when it's the market takes all of the buy stops all those sellers then what's next come back and take out the buyers come back and take out the buyers now the market is not going to move like this exactly all right the way it's going to actually be moving will be something like this and I give you a more realistic scenario and then we have let's say hello hello hello okay let me just fix this oh there we go all right we got to range from here to here all right so there is cell stop sitting below that breakout Traders they're expecting price to break can keep on dropping forever to so they can make money so what the market does is this right just below this there's going to be a point of interest just below this is going to be a pii so what the market is going to do is it's gonna take liquidity tap into a Pui in other words where smart money interest and then reverse on to and he going to keep on dropping let's go and tap these Traders orders and then reverse on them this reverse this pullback right is taking them out it's taking out the people that got attacked in and then it go one more time and then what's happening what is going on when price making this reverse there's sellers coming in the market so now that those liquidity that's why we target the external range we got TR liquidity sometimes equal highs all of that and the market goes and takes out external we took out sell stops there's buy stops all right here breakout Traders all right here then what happens it reverses that's the range cycle or that's at least what I call it cycle of the range right so now let's give you a realistic scar of this there's quity there there's a POI just above this just above this Market it's going to take out the buy stops reverse on them take out byy stops take out reverse on them and you want to take out this and now what is this building more liquidity do make any sense so far this is external and internal liquidity which I just call Advanced liquidity because it is kind of Advan right but you you have to understand this you order to understand the ranges and then of course we combine everything else all the basic liquidity has strong highs and strong lows but we have to understand this this is the range right so that's external and internal liquidity now let's get straight into just the range itself all right so we know what a Strong high is takes out liquidity and break structure that is a strong High s we know what a strong low is takes liquidity and break structure that would be as right not stop loss but strong right that's the short term right now the Strong high now we also have a weak High which wh which also takes out liquidity and break structure then we have a weak low which also takes out liquidity and break structure but how do we combine this let me show you so when we have strong low when strong low is formed and a point of Interest they're pretty much always formed in the POI right when strong low is formed in a point of Interest or just strong low in general it will automatically hear me out it will automatically create a weak High okay it will automatically create a weak high so once that strong is form we know automatically that a weak high is going to be created all right that would be a weak high this is also automatically our Target all right our Target because we are in this range so automatically a weak high and it's automatically our overall Target of this range okay so the same thing once a strong strong high is created it will automatically create a weak low automatically create a weak loow which becomes the target for that range from A to B okay so because it's weak and that's our Target right however even though it's a weak high in this range it is also a obstacle is also a obstacle and for those that don't know what a obstacle is it is something in the way of the overall direction or move so what do I mean by that I mean that this high endorsement price can give you a entry right and give you entry give you a reaction let's say now when price gives you a reaction this doesn't mean this re this reaction right here is going to come all the way down and then go no we just know that it can give you a reaction so write that down right it can give you a reaction can you enter from here yes can you look for for a short here yes you can look for potential shorts here if it has liquidity of course and Turnal liquidity and inducement now as we're talking about this real quick and internal liquidity is not the same as inducement internal liquidity it's what's inside the range when it's forming the inducement is a failure swing okay two different things so in this scenario we have ENT liquidity change it ENT liquidity and inducement feeding into this unmitigated strong in this scenario here is considered a strong right and the overall picture is weak high right but why is it a strong High well now it's time to dig a little bit deeper into the ranges when a range is created and it break structure a new Range will be created if this range is the one hour from here so here then a 15 minute let's say a break structure on the 15 minute or this is a 15-minute break let's just call it that right a break structure then a new Range will be created so let's say on the 15 minute you create a new Range after it broke this structure so that's where you get a pullback in continuation there's a range inside of a range okay that's where this comes in play all right another thing highs and lows can be shared so what does that mean so this red do is the one hour all right the fth 15 minute can also use the same high but it will only be a 15 minute let's say strong low these two can be shared that high can be shared with multiple time frames but you will not see this on the one hour you will only see this in the 15 minute this is going back to what I mentioned about fractal okay stay with me now so this we make a retracement take out liquidity and then you can short to fulfill the overall bigger range there's a range inside of a range right so let's go back to this so if this high right here was a broke structure created a new range right here it's a new Range inside of this other range so from A to B is inside of a and b you see that so because this is a new Range there's liquidity this bigger range right the red one becomes a strong High because they're sharing the same range or in this case the same high that's why we can get a reaction from here and this can go and then give us that move to fulfill the bigger range so far making sense now you got to be careful right because if this already fulfilled the bigger range it will still give you a reaction but it will fail it will fail to break this low right here and because price fails that becomes a what weak High failure swing that just feeds more liquidity so you will get taken either Break Even or a loss and that's why you're moved didn't go why didn't work okay you have to understand this all right so that becomes weak it will get taken but if it's not then it'll go regardless your target is going to be this low remember we target external external ranges all right that that that's our Target for every single range okay so that's on that let's go to this one over here just colors we right so I hope this made sense so far so now let's delete this let's go over some more examples of the ranges inside range so we have this range right here price BR struction and let's say it's 1 hour and let's color this purple so the purple is the 1 hour all right so from A to B and then we have 15 minute so that would be green okay 15 many high is being shared which becomes a with B broke structure now it's going to create that weak low okay in this range because once a strong high is created a weak low is automatically made our Target is that weak low for that range for 15 minute range for range a and then price will pull back up and of course we have have some liquidity here take it out right and then we target this now let's say we have liquidity right here on the bigger range on the purple one right that's where price going to come into and then go up to take out this external range after internal taken external is our next Target so now how can you maximize this short from up here how can you maximize that short from up there well if you know at the bigger range has liquidity internal liquidity in here and there's a POI just below right there then your target has to be the internal liquidity of this range we're not going to Target the POI that's important we're not going to Target the POI we're going to Target the internal range of the bigger range whether it's the four one remember the market is fractal right if you're not going to Target this little right here then you can Target the bigger range liquidity why is that because let's say that price does this let's say price takes this low out and then this happens reverses you just left all of this right let's say that you were floating you know let's say $1,000 pull back now you're floating only 100 or maybe it took your outbreak even and then it dropped and then it went see what I'm saying so now we're talking in the perspective let's say right if there was liquidity here and there was a POI just below that so many colors all right it tabs into there and never it hits the POI and then it pulls back and then it comes then it goes okay that's why we target the internal liquidity here wrong color but yeah right there but let's say price comes reverses just like the first on time I did this right and it takes you our break even well there's nothing you can do that happens then it drops and then it takes a liquidity but it still comes back up then it drops one more time then it goes this can happen it's simply building up liquidity this is a more realistic scenario of course right so that's where you pay yourself that's why we target this is our first Target the low of the low or the high of every range external is our first always our first Target in other words I call it our safe Target okay we we have a higher chance of this just hitting to the T before it makes some type of reversal then it coming all way down here because who knows it could take forever where it goes down here but is our safe Target if you don't want to Target this you want to hold into here then you're going to take partials now how many well not how many but how much percentage or say parure should I take that really depends on you to be honest I take 50% on that low because again this cation break me even and then drop at least I paid myself right at least 50% that's just me or you can take all of it right this is a personal choice because it depends on your account size it depends your your goals are you compounding are you doing FDO um whatever this is a personal thing and this would be covered in a different video but for now let's say we take 100% right here so nice and the rest comes in here push back then it comes then it goes okay so I hope this Mak a sense so far I know a lot of information take in that's why you got to rewatch it all right so we covered liquidity okay we covered external liquidity external liquidity was covered that's the highs all right and the lows all right that's it external liquidity external we covered internal liquidity which is what's inside the range all right while is forming that's the internal Equity then we covered inducement which would be a failure swing then it gets taken that's an inducement and now we covered ranges sharing a structure point right sharing a structure point that happening that is happening here okay show struction point so we got green and red sharing this low right here and sometimes they might even share the highs but it goes vice versa it goes both sides okay and then we went over potential targets which was the internal liquidity of a higher time range and we not going to Target the external liquidity of your current range we understand that there is a range inside of a range right and we also understood pretty much the difference between a inducement andity right now let's go over one more thing let's say we create 15 minute we get inducement gets taken comes to a point of interest and we also have the same high being shared with this one that's our first Target and then if the one hour is the white the 15 minute is the red then let's say the one minute with the purple so the purple high was shared with the red so the same thing happens inducement short and we still Target that range right this goes back to what I said the market is fractal a range inside of range