Liquidity: Buyside & Sellside - ICT Concepts
Introduction
The video introduces the topics of liquidity, buy side and sell side liquidity, swing points, and the psychology of traders.
Understanding Swing Points and Liquidity
- Swing points are determined by identifying higher lows on the left and right for a swing low, and lower highs on the left and right for a swing high. These swing points help determine where liquidity is resting.
- Traders tend to place their stop orders at swing lows when going long, and at swing highs when going short.
- Sell side liquidity refers to cell stops resting below swing lows, while buy side liquidity refers to buy stops resting above swing highs.
- Smart money looks to pair orders below swing lows and above swing highs.
Identifying Swing Points and Liquidity
This section focuses on practicing how to identify swing points and buy/sell side liquidity using chart examples.
Chart Examples
- On a four-hour chart, we can identify obvious highs and lows as potential areas of sell or buy side liquidity.
- By observing the pattern of higher lows on each side of a low point or lower highs on each side of a high point, we can determine if it represents sell or buy side liquidity.
- As price moves through these levels, new swing points are formed which may indicate shifts in buy/sell side liquidity.
Old Highs/Lows and Equal Highs/Lows
This section discusses old highs/lows and equal highs/lows as types of liquidity levels that can be marked out on charts.
Old Highs/Lows
- Old highs refer to previous significant high points in the market that stand out individually.
- Old lows refer to previous significant low points# Introduction
The video introduces the topics of liquidity, buy side and sell side liquidity, swing points, and the psychology of traders.
Understanding Swing Points and Liquidity
- Swing points are determined by identifying higher lows on the left and right for a swing low, and lower highs on the left and right for a swing high.
- Traders tend to place their stop orders at swing points.
- Sell side liquidity refers to cell stops resting below swing lows, while buy side liquidity refers to buy stops resting above swing highs.
- Smart money looks to pair orders below swing lows and above swing highs.
Identifying Swing Points
This section focuses on practicing how to identify swing points or buy side and sell side liquidity using examples from a chart.
Examples of Identifying Buy Side and Sell Side Liquidity
- On a four-hour chart, we can identify obvious highs and lows as potential areas of buy side or sell side liquidity.
- A low with higher lows on each side indicates sell side liquidity.
- A high with lower highs on each side indicates buy side liquidity.
- Continuously identifying new swing points helps track changes in liquidity levels.
Old Highs and Lows
This section discusses old highs and lows as well as relatively equal highs or lows as forms of liquidity levels.
Types of Liquidity Levels
- Old highs refer to previous significant high points in the market, while old lows refer to previous significant low points.
- Relatively equal highs occur when two different swing points are close together, forming a cluster of resistance levels.
- These old highs and lows serve as important reference levels for traders.
Previous Week's High and Low
This section highlights the significance of marking previous week's high and low as liquidity levels.
Using Previous Week's High and Low
- Marking the previous week's high and low on a chart helps identify potential reversal points or areas of interest.
- Traders can use these levels to frame their trading strategies, such as entering trades when price moves back into the fair value gap.
Previous Day High and Low
This section emphasizes the importance of marking previous day's high and low as liquidity levels.
Utilizing Previous Day High and Low
- Similar to previous week's high and low, marking the previous day's high and low provides valuable reference points for traders.
- These levels can be used to frame reversals or act as targets for price movements.
Session Highs and Lows
This section discusses using session highs and lows as liquidity levels.
Incorporating Session Highs and Lows
- Marking session highs and lows, such as Asia session highs/lows or London session highs/lows, helps in framing narratives, drawing support/resistance lines, or identifying potential reversals.
- These levels provide additional context for traders to make informed decisions.
The transcript is already in English.