Speaker A
how's it going everyone? This video is going to cover liquidity, buy side and sell side liquidity, and we will mainly be focused on old highs and old lows, as well as equal highs and equal lows.
TTrades explains buy side and sell side liquidity in ICT trading, focusing on swing highs and lows, equal highs/lows, and where stop orders rest.
Key Takeaways
- Swing points define where liquidity rests in the market.
- Stop-loss clustering at swing highs and lows creates buy side and sell side liquidity pools.
- Liquidity levels such as previous day/week highs and lows and session highs/lows are important to mark on charts.
- Price often sweeps liquidity before reversing or displacing in the opposite direction.
What the video covers
- Introduces liquidity concepts: buy side and sell side liquidity, mainly around old highs/lows and equal highs/lows.
- Defines swing points: a swing low has higher lows on both sides; a swing high has lower highs on both sides.
- Explains trader psychology: longs place stops below swing lows, shorts place stops above swing highs.
- Sell stops rest below lows (sell side liquidity); buy stops rest above highs (buy side liquidity).
- Describes how price is reached for liquidity, with smart money pairing orders beyond these levels.
- Walks through a four hour chart to identify obvious highs and lows and classify them as buy or sell side liquidity.
- Covers previous week's and previous day's highs and lows as key liquidity levels to mark on charts.
- Demonstrates session-based liquidity (Asia, London, New York) and how session highs/lows get taken.
- Notes that fair value gaps and displacement can signal reversals after liquidity is taken.
- Mentions a free indicator linked in the description and a free Discord community.
Chapters
Full Transcript — Download SRT & Markdown
Speaker A
higher low to the left and a higher low to the right and that makes this a swing low similarly over here we have a high with a lower high on the left and a lower high on the right that makes this a swing high now to understand why this is important we have to understand the psychology of Traders if someone was to get long in this area here they are likely to put their stop on the swing low similarly over here if they're going to get short they're likely to put their
Speaker A
Before we get into anything, the first thing we need to understand is swing points in the market, because this is how we determine where liquidity is resting.
Speaker A
liquidity so looking at this four hour chart here where are the obvious highs and lows we have a low right here this would be sell side liquidity because you notice we have a low with a higher low and a higher low on each side we have a high right here with a lower high on each side so this would be our five side liquidity now if you notice what did we just put in we put in another swing point because we have a high with a lower high on each side so this would be considered by side liquidity
Speaker A
Over here we have a swing low. And how do we determine if we have a swing low? Well, we have a low right here with a higher low to the left and a higher low to the right, and that makes this a swing low.
Speaker A
another swing here since this didn't take out this previous low those are now relatively equal those and so those are just sell side liquidity together and I'll take out this pie and if we put in a lower high on this side this will become our buy side liquidity which it does now we have buy side resting here
Speaker A
Similarly, over here we have a high with a lower high on the left and a lower high on the right, and that makes this a swing high.
Speaker A
now we put in a swing low and this is reaching for that buy side up there and now that is taken if we put in a swing low now this becomes our buy side liquidity and you can see how this continues the next thing we are going to look at are two types of liquidity and those are old highs and lows in a relatively equal highs in the post and so I have them marked out on the chart here from the previous example it can look like this where you have two different swing points that are
Speaker A
Now, to understand why this is important, we have to understand the psychology of traders. If someone was to get long in this area here, they are likely to put their stop on the swing low. Similarly, over here, if they're going to get short, they're likely to put their stop on this swing high.
Speaker A
week's high and low so if we look at this previous week here is a Tuesday low and here is Thursday high and why I Mark these out is it's a pretty easy draw on liquidity or a way to frame a reversal so looking at this we take this previous week's high back into this fair value Gap and then from here what do we do we expand higher that is something I always have marked out on my chart the next liquidity level I always have marked out on my chart previous day high
Speaker A
With that understanding, we know that there are sell stops resting under here and buy stops resting above here. With the sell stops resting below here, we call this sell side liquidity, and with the buy stops resting above here, we call this buy side liquidity.
Speaker A
highs and lows can work out so if you notice here we have our Asia session low that's already been taken but above us we have Asia session High London session high and London session low all have not been reached so as we go into New York open we get a move up we take that London session High Reach for midnight we end up taking that Asia session I as well now do we get a nice break of structure not really yet there we get some displacement down looking in here do we have any sort of
Speaker A
Smart money will look to pair orders below these lows and above these highs.
Speaker A
so looking at this next day we will also Mark out our previous day high and low right here and right here and we'll go ahead and watch this stay play out from Asia it's right here you can see Asia hide being created being taken now we get London session see what happens and there we go so we take our London session alone and Asian session low no real displacement below here let's see what happens we start to get displacement up we have a five minute fair value Gap here see if that gets tagged
Speaker A
So let's get into the charts and look at some examples. We are now going to practice identifying these swing points for buy side and sell side liquidity.
Speaker A
and then we continue higher so hopefully that shows you how to use liquidity and what important liquidity levels you can Mark out if you don't know what to Mark out the indicator used in this video is free and I will link it in the description below also wanted to let you guys know that I did start a free Discord so if you want to check that out the link will be in the description as well and I'll do my best to have a PDF document of this video out in the description before it releases but
Speaker A
Looking at this four hour chart here, where are the obvious highs and lows? We have a low right here. This would be sell side liquidity, because you notice we have a low with a higher low on each side. We have a high right here with a lower high on each side, so this would be our buy side liquidity.
Topics:liquiditybuy side liquiditysell side liquidityICT conceptsswing highswing lowequal highsequal lowssmart moneyprice action
