Complete guide on trading LIQUIDITY

 Complete guide on trading liQuiditY in tHe ForeX marKet. In this E-book, I will explain the following:  Normal liquidity in the forex market.  Asian liquidity session and how to know the first direction for liquidity grabs. Yes and Amen! I am here humble to present to you about liquidity in the forex market. I wasn’t planning on writing another E-book on liquidity but I got lots of requests concerning the issue of liquidity in the market. The other E-book I wrote was only explaining about order blocks, Wyckoff and the likes. Without further ado, let’s go straight to the contents of this book.  WHat iS liQuiditY? Liquidity in Forex Trading Term used to describe a market where there are lots of buyers and sellers generating a great deal of volume. From what we have here, I would say liquidity is where there is a lot of money and most people are looking to take trades. If this type of situation happens then we know millions of people are targeting to make profit from. Then a lot of stop losses and entries will be at that liquidity zone. We can also say liquidity means a lot of stop losses and if there will be a lot of stop losses in a particular zone, then smart money will look for where there is a majority of stop losses, take them out before moving the initial direction. In this book I will be showing us how the market makers and smart money algorithms use order blocks to take out liquidity in this market. Once market takes out liquidity, it takes it out sharply and doesn’t want the majority to take or place trades once they are grabbing liquidity, that’s why you see aggressive moves or spikes while they are grabbing liquidity in the market and you are wondering if there was news in the market or the market just wanted to move like that. That’s Smart money for you!  normal liQuiditY in tHe ForeX marKet. Like I’ve stated before, I will first talk about the normal liquidity in the market and we move to the Asian session liquidity. I will make this E-book short but detailed on how to trade liquidity grab. “IF YOU CANNOT SPOT THE LIQUIDITY, THEN YOU ARE THE LIQUIDITY” What’s the meaning of this? From what I just quoted, if you don’t know where the liquidity is in the forex market, you end up getting your stop losses hit due to the fact that you are placing trades where there is going to be a lot of volume that would take out your stop loss.  HoW do We Spot liduiditY? We spot liquidity when we can see that there are obvious buyers and sellers in the market. How do we know where the obvious buyers and sellers are?? We spot the LIQUIDITY IN THE FOREX MARKET. 2 TRADEWITHWORLDBANK buyers and sellers simply by identifying the obvious support and resistance areas in the market

ILLUSTRATION 1: IDENTIFYING POSSIBLE AREAS OF LIQUIDITY.

This has said a lot already, I didn’t crop it to the current market price because I have fresh analysis and I don’t want to tamper with it. Firstly, looking at this we can see the support zone which is a zone for buyers to start taking long positions then we know there is volume at that zone. 2 nd ly, we also know that if the market wants to grab liquidity, they do that with order blocks below the liquidity. We all know about the order blocks, if you don’t know about order blocks, just do well to chat me(Telegram and Whats-app contact available on last page of this book) or read my previous E-book on order blocks. The entry would be at the order block candle below the liquidity, imagine the sniper entry, they went up fast without looking back. If you don’t have this type of knowledge, you might also be trying to trade the support zone and unfortunately, you would be taken out because your SL will be exactly below the zone and you become the liquidity. Some people always ask if they can redefine the entry using the smaller time-frame on the m5, but I always tell my students to set the pending orders immediately they spot

he order block above or below the liquidity, because we know that once they grab liquidity, they might not look back to give entries for the smaller time-frames. ILLUSTRATION 2.

he $ sign represents liquidity telling us that a zone is available for liquidity. Mere looking at this, we already know what happened, strong buyers zone and we surely know that market will surely take the new buyers out. The grab occurred so fast when it got to the order block below liquidity. NOTE: If you spot an order block in a liquidity zone, don’t trade the order block because we know the market will surely clear liquidity, trade the order block below the liquidity. I sent this very setup to my students and even to the free group and people milked. Why didn’t we trade the liquidity for sell since there is a zone above? First, according to my trading plan, once I catch a trade I like holding it till I get stopped out! Whereas I would have taken partials and allowed runners to run. Second reason, we didn’t take the sell because there is no order block above the liquidity to give us a sell entry. Where will TP be? I get this question every time because once I send signals to my students, I don’t send TP. This is because I like holding and don’t care about TP zones. But the most reasonable area for setting TP on any trade taken should be above another liquidity as shown in illustration 2, because we know they might want to grab liquidity on that zone too. What’s most important is the SL and trailing stops that’s why we use 3 - 5 pips SL in the mentorship group when I send signals, maximum of 10 pips due to spread etc.

ILLUSTRATION 3A

Now we are used to how the structure of liquidity grab looks like, from this image we have two order blocks that are below the liquidity area. The order block to take this type of trade is the most recent order block because that's the most recent low of the market as we all know that order blocks are always formed at the lows of the market for an uptrend and formed at the high of the market for a downtrend. TP will always be above another liquidity area. These types of trades are clean and easy to trade without the use of any indicators. Trading with liquidity grabs: the SL should always be 10 pips because the market always spikes while trying to take out the liquidity. I do send signals with 5 pips like I said earlier because we use the Wyckoff liquidity to enter trades in the mentor ship group. Wyckoff is more accurate and gives minimal stop losses entries on wyckoff are found after the market has grabbed liquidity. I will not be explaining wyckoff liquidity in this book. ILLUSTRATION 3 could have confused you because of the two order blocks that were formed below the liquidity zone but never forget that when you are looking for entries, your orders should be placed on the most recent order block that

ILLUSTRATION 3B.

 This is the same thing like I have explained above earlier. Market will always repeat the same thing over and over again. The liquidity was formed while resistance was created and the entry would be exactly at an order block right above the liquidity. Then TP will be after the liquidity grab when you have seen enough profit. What confirmed this trade was the impulsive move after the HIGH IMPACT USD NEWS that came up around 1:30pm yesterday. The news created imbalance and volatility, and we all know that market would surely fill imbalances whenever there is an order block above or below the imbalance area that was the confluence for taking this trade and in the process of mitigating the order block, market had created early resistance that created liquidity which would surely be taken out in the future. Now the market is moving to the places of liquidity again to take out all the buyers and sellers in the market. That’s the work of smart money algorithm. The composite man tries to trap all the sellers and buyers in the market, luring them to place trades in specific areas of liquidity allowing them to be trapped and take them out as soon as there is enough volume and liquidity to take out on them. Am not saying retail trading is bad but as a retail trader you have to consider many factors before taking a trade, like the market structure, confluence, weekly and daily trend, not just support and resistance because support and resistance areas are places of volume the composite man uses to take out traders. We have the advanced support and resistance which are not the normal types of support and resistance zones. That’s why I want to add the market fluidity course to my mentorship for my students who still don’t have the full understanding of smart money concepts yet.