**Important Liquidity Levels - Draw On Liquidity - ICT — Transcript & Summary | SozAI**
Source: https://sozai.app/transcript/important-liquidity-levels-draw-on-liquidity-ict/

Explains how to select important liquidity levels using previous month, week, and day highs and lows, and how price draws on them to frame reversals or directional moves.

## Key Takeaways

- Marking previous month, week, and day highs and lows helps identify likely draws on liquidity.
- Price usually reaches for one or both sides of a range unless it is consolidating.
- Displacement and where a candle closes provide clues about which liquidity level price will target.
- Session highs and lows can be used both as draws on liquidity and to frame reversals.

## What the video covers

- Introduces the three things a candlestick can do: consolidate, take out one side of the range (directional move), or take out both sides.
- Explains that unless price is consolidating, it tends to reach for the previous candle's high or low, making those levels key to anticipating moves.
- Covers previous month's high and low as draw-on-liquidity and reversal-framing levels, illustrated on the gold daily chart.
- Applies the same concept to previous week's high and low, showing how weekly levels frame reversals and draw price.
- Shows how previous day's high and low can serve as simple draws on liquidity or reversal triggers.
- Discusses session highs and lows (Asian, London, New York AM) as liquidity sources usable during the day.
- Walks through chart examples using a kill zones and pivots indicator, tracking sweeps, displacement, and closes back into ranges.
- Notes that displacement and close location help determine whether price is more likely to reach for the high or the low.
- Mentions that daily profile and daily bias topics are covered in separate videos.

## Chapters

1. 00:00 Introduction and Video Overview
2. 01:54 Three Things a Candlestick Can Do
3. 03:59 Previous Month High and Low
4. 06:15 Previous Week High and Low
5. 08:00 Previous Week Examples on Chart
6. 10:28 Previous Day High and Low
7. 11:40 Session Highs and Lows

Answers

## Questions about this video

What are the three things a candlestick can do according to this video?

A candlestick can consolidate without taking out the previous candle's high or low, take out one side of the range in a directional move, or take out both buy-side and sell-side liquidity. These behaviors help determine where price is likely to draw next.

Why are previous month, week, and day highs and lows important?

They act as liquidity pools where stop orders often rest. The video explains that price tends to reach for these levels, which can be used to frame a draw on liquidity or anticipate a reversal.

How can displacement help determine which liquidity level price will target?

The presenter notes that when price displaces strongly and closes near one side, it is more likely to reach for the opposite liquidity level. Weak displacement or indecision candles leave both sides possible.

## Full Transcript — Download SRT & Markdown

00:04

Speaker A

[Music] How's it going everyone? This video is going to be about selecting important liquidity levels and why it is important to understand where they are located. Now, if you haven't seen my latest video on kill zones, make sure to check that out, as it will be important to understand for this video. We're first going to discuss the three things a candlestick can do. Then we'll talk about previous month's high and low, previous week's high and low, and previous day's high and low. And then we will talk about sessions and the liquidity that is formed during each session and how it can be used throughout the day.

00:33

Speaker A

and then we will talk about sessions and the liquidity that is formed during each session and how it can be used throughout the day there are three ways a Candlestick can form and if you know the Strat you have heard of this now the first way is a consolidation and that means that this candle here could not take out the previous candle's high or buy side liquidity or the previous candle's low or sell-side liquidity by definition price is just consolidating here now the next thing price can do is

00:57

Speaker A

There are three ways a candlestick can form, and if you know the Strat, you have heard of this. The first way is a consolidation, and that means this candle here could not take out the previous candle's high, or buy-side liquidity, or the previous candle's low, or sell-side liquidity. By definition, price is just consolidating here.

01:25

Speaker A

moving towards the previous candle's high or low or in some cases both and this is why it is important to know where these levels are located on multiple different time frames but first we are going to look at previous month's high and low as shown in the previous slide unless we are in a consolidation we are looking for price to reach for one or both sides of the range so you can see here on the first diagram price reaches to previous month's low here A reversal was created and then price

01:53

Speaker A

The next thing price can do is take out one side of the range. For example, here price takes out buy-side liquidity but does not reach for sell-side liquidity. Similarly, over here, price takes out sell-side liquidity but does not take out buy-side liquidity. So this is a one-sided or directional move.

02:22

Speaker A

month's low before going lower then price reaches for the previous month's high before reversing then reaching for previous month's low low reaching for previous month's low once again and then previous month's low again so you can see price draws towards these areas and or uses them to frame a reversal now getting back into the PDF you can see the same concept applies on the weekly time frame as well here you can see a reversal was framed off of previous week's low and then we end up going to

02:53

Speaker A

The last thing price can do is take out both sides of the range, buy-side and sell-side liquidity. For example, here price took out buy-side and sell-side liquidity. So if price is not in a consolidation, I can anticipate price moving towards the previous candle's high or low, or in some cases, both. This is why it is important to know where these levels are located on multiple different timeframes.

03:23

Speaker A

previous week's low is more likely here we hit previous week's low fail to display or close out the range so then I would anticipate price reaching for previous week's high and there we reached previous week's High not a lot of displacement or Direction so here kind of an indecision candle so it could reach for previous week's high or low here we displace out and close so is price more likely to reach for previous week's low or previous week's High probably previous week's

03:59

Speaker A

But first, we are going to look at previous month's high and low. As shown in the previous slide, unless we are in a consolidation, we are looking for price to reach for one or both sides of the range. So you can see here, on the first diagram, price reaches to previous month's low. Here a reversal was created, and then price reaches back into the range. Here price just goes and reaches for previous month's high. So you can see these levels are used to frame a draw on liquidity or a reversal.

04:29

Speaker A

here there we get some displacement down still closing right at previous week's low so we can Mark both these out and see what happens and price reaches for previous week's low so the point of going through price action like this is showing that on a weekly time frame here unless price is going to consolidate it is likely to reach for a high or a low so this can be used to frame a draw in liquidity or frame a reversal and why is important to have it marked on the chart and as you

04:59

Speaker A

So let's go take a look at this on a chart. Here we are on the gold daily chart, and I have marked out our monthly high and low with a solid line, and then extended that into the next month. So we have our previous month's high and low marked out with a dotted line. You can see here, in this month, price reaches for the previous month's low before going lower. Then price reaches for the previous month's high before reversing, then reaching for previous month's low, reaching for previous month's low once again, and then previous month's low again. So you can see price draws towards these areas and/or uses them to frame a reversal.

05:29

Speaker A

to this high or this low probably the low here we close back in So price could reach for this high but it is a very small dogee candle so could reach for either side I'm not really certain here we reach for both sides put in an outside bar here I'd like to see a continuation higher to previous day high here we just missed previous day high so we'll go ahead and Mark out our previous day high and low there we take previous day low let's see what happens here and we take previous day low

06:15

Speaker A

Now, getting back into the PDF, you can see the same concept applies on the weekly timeframe as well. Here you can see a reversal was framed off of previous week's low, and then we end up going to previous week's high. Down here, previous week's low is used as a draw on liquidity before price moves lower.

06:43

Speaker A

which is 20 to Z London which is 2: to 5 and the New York am session from 8:30 to 11: and similarly to our previous sections in this video the session highs and lows can be used as a draw on liquidity as well as to frame a reversal now now a lot of this gets into the daily profile but we'll be keeping that for a later video series so let's hop into the charts and go over a few examples of this so in this example I'm going to be using tfo's ICT kill zones and pivots indicator and these are the

07:13

Speaker A

So here we are on the weekly timeframe, and similar to the monthly, the same concepts apply. I would be looking for previous week's high or low. Let's see what happens here. We reach below previous week's low and then close lower, so I can anticipate price reaching for previous week's low or previous week's high. Since we are trending down, I think previous week's low is more likely. Here we hit previous week's low, fail to displace or close out the range, so then I would anticipate price reaching for previous week's high. And there we reached previous week's high, not a lot of displacement or direction, so here, kind of an indecision candle. So it could reach for previous week's high or low.

07:33

Speaker A

you can see the script rewriting the highs and lows and here the Asian range has formed so now we will be watching this high and this low so right here we're failing to displace out of this area so ideally this makes me look to the other side of the

07:56

Speaker A

Here we displace out and close, so is price more likely to reach for previous week's low or previous week's high? Probably previous week's high. Here we displace out, close back in, and if you notice, we did reach over into this fair value gap. So with that in mind, I'd want to see price reach for previous week's low, but we'll also mark out previous week's high. And there you go, we hit our previous week's low, we close back in once again. Similar to the indecision candle over here, it could reach for either side of this range. Here we get some displacement down, still closing right at previous week's low, so we can mark both these out and see what happens, and price reaches for previous week's low.

08:47

Speaker A

I'd want to see price displac back through this area here so we just Place through it there and you can see how it is using it as an inversion level so from here I'd want to see price continue lower now that we started the New York am session here's displacement down and through our levels here so you can see how the lack of displacement over Asia high and then displacement below Asia low is what gave indication for what follows in the New York am session so in this last example here we

09:24

Speaker A

The point of going through price action like this is showing that on a weekly timeframe, unless price is going to consolidate, it is likely to reach for a high or a low. This can be used to frame a draw on liquidity or frame a reversal, and that is why it is important to have it marked on the chart.

09:53

Speaker A

will notice there is an smt right here meaning that NASDAQ made a lower high while es made a higher high showing a crack in the correlation so with this idea in mind if we're looking for price to draw to previous month's low or this low here we want to see some sort of shift on The Daily time frame so let's wait for that to play out so here we get displacement down a close below these upos candles so ideally I want to see price reach back up retrace before going

10:28

Speaker A

As you could probably expect, the same concepts apply on the daily chart. As you can see, previous day low is framing a reversal as well as being used as draw on liquidity. We won't go through as many examples here, as that is what my daily bias video covered, but let's walk through a few right here. So marking out previous day high and low: is price more likely to draw to this low or this high? Likely to reach for this low. So there price reaches for the low once again. Is price more likely to draw to this high or this low? Probably the low. Here we close back in, so price could reach for this high, but it is a very small doji candle, so it could reach for either side. I'm not really certain here. We reach for both sides, put in an outside bar. Here I'd like to see a continuation higher to previous day high. Here we just missed previous day high, so we'll go ahead and mark out our previous day high and low. There we take previous day low. Let's see what happens here. We take previous day low again, and previous day low again. So you can see previous day highs and lows can be used as a very simple draw on liquidity or used to frame a reversal.

10:52

Speaker A

out so right here our Asian range has been completed so let's see if we get any displacement or lack of displacement over that so right here we are getting a little bit of displacement out let's see what happens next not a whole lot now we displace back through the range I'm not really interested until the New York session so I'm just

11:24

Speaker A

Now, before we talk about session liquidity, it's important to understand when these sessions, or kill zones, are. In this video, we'll be focusing on the indices kill zones and the Asia, London, and New York AM sessions. If you've missed my video on kill zones, I'll link that in the top right. We are going to be focusing on Asia, which is 20:00 to 00:00, London, which is 02:00 to 05:00, and the New York AM session, from 08:30 to 11:00. Similarly to our previous sections in this video, the session highs and lows can be used as a draw on liquidity as well as to frame a reversal. A lot of this gets into the daily profile, but we'll be keeping that for a later video series.

12:14

Speaker A

low and there we go we hit previous day low before getting a reaction out so there you can see how we went from the monthly to the Daily to the lower time frames aligning them all and getting a drawn liquidity we then use the sessions to organize is an entry and Target our draw on liquidity I hope you found this video helpful if you did please consider liking and subscribing and I'll see you guys next

12:47

Speaker A

So let's hop into the charts and go over a few examples. In this example, I'm going to be using TFO's ICT Kill Zones and Pivots indicator, and these are the settings I have for them. I have selected Asia, London, and New York AM with the times listed, and then I have my pivots marked off with no text to keep it clean. What I'm going to focus on is the displacement, or lack of displacement, out and around these areas.

Topics: liquidity levels buy-side liquidity sell-side liquidity draw on liquidity previous week high low previous month high low previous day high low ICT session highs and lows reversal

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