Liquidity Definition
"liquidity as it relates to ICT Concepts it relates to buy orders and sell orders it's as simple as that"
"we as price action Traders we looking specifically for reference points where we can hone in on where there is a high probability of liquidity resting in the marketplace"
Time Frame Universality
"when we look at price it doesn't matter what time frame you're looking at time is irrelevant for right now"
"this is not specific to any time frame it's Universal"
Stop Loss Placement & Liquidity Location
Above Old Highs
"if there's a short position or traders that are bearish on the marketplace if they have position a profitable trade here and moved lower their stop loss order would be resting right above this high or generally many times just rate at that high"
"when we look at the lows when the market moves away from these lows we see that as sell liquidity"
Market Maker Perspective
"we view that as a smart money Trader or as a market maker perspective we know that there's going to be buy stop or buy liquidity above that high"
Fundamental Understanding
"our First Fundamental understanding is is that there's going to be above old highs and Below old lows"
"moving price just above an previous High knocking out the liquidity that would be resting just above those highs in the form of buy stops below old lows the market will seek liquidity for the sell side or the sell stops taking those orders out"
High Resistance Liquidity Run
Definition & Structure
"when we see the market give this thick area of resistance okay there's a lot of price action that the market has to trade through to get back to an old high of significance we view this as a high resistance liquidity run"
"the Market's going to have a very hard time getting through all of these previous lows and previous highs just to run out the liquidity that would be resting above this old high"
Visual Pattern
Trading Implications
"when we trade we are not looking for these opportunities while there are opportunities to trade with this in mind it's important to understand that this is the least probable trading condition to look for Longs"
"you have so many levels of resistance and old highs to counter before you get back to the old significant High"
Highly Defended Concept
"those individuals with stops above this old high in the form of a fund they're actually very highly defended because of this type of price action"
"it's going to take a very uh sharp economic Market release the data kind of like nonfarm payroll or fomc that type of event will knock through all these levels of resistance to run out that liquidity"
"generally without that type of influence or injection of volatility these old highs generally are well defended"
Low Resistance Liquidity Run
Definition & Characteristics
"there's going to be times when the market really provides us a an opportunistic time to take action in the market and trade with price action and have very little resistance in our trades and obviously that comes by way of trading in low resistance liquidity runs"
"if we see the market come off a old high and it comes down rather quickly if there is a very sharp or one-way type Direction very little uh retracements of any kind"
How It Forms
"once that market breaks below an old low from that point at which it breaks the old low until it gets through a shortterm high"
"if we get a market break through this shortterm high this run here begins its climb back up into the range that's created by this low being broken"
"once it's broken this area of if price action is deemed low resistance"
Visual Pattern - Bullish Low Resistance Run
Hot Knife Through Butter
"it's like a hot knife through butter very little resistance to every time a low is formed price goes through those lows"
Easiest Trading Condition
"this expansion that's the easiest part of trading when we can trade inside that range"
"this is the easiest time to trade in the marketplace"
"this is the easiest area to trade in price action because you have very little resistance allowing price to just cut through all that"
Bearish Low Resistance Liquidity Run
Structure Description
"the market will have a very easy time trading back down into the point at which the shortterm high was broken on the upside"
"all this oneway direction price action where all of it looks just one-sided for buys only very little retracements this is the easiest time to trade in the marketplace right in here it's defined by the short-term High that's broken on the upside here"
Visual Pattern - Bearish Low Resistance Run
Short-Term Low Liquidity
"every time a short-term low forms there's going to be sell stop liquidity resting below those lows"
"you're focusing primarily on selling short every retracement is going to find very little resistance going lower to run out the previous low"
Bullish Low Resistance Liquidity Run
Buy Side Liquidity Above Short-Term Highs
"every time that a new short-term high is formed before this low is ret traded to or retested as resistance every time there's a new short-term High what's going to form above that short-term high it's going to have buy stop liquidity"
"if we get a Buy Signal after a retracement we know that there's going to be very little resistance for that move to go higher running out the buy stops just above these short-term highs"
Trading The Range
"every time we create another short-term high in here if we get a buy syal that Buy Signal will have very little resistance to get through the old high that it retraced from and you continuously look for those until you fill in that break on this old low"
When High Resistance Returns
"as we get closer to coming up into hitting this low that's been violated here when then we start encountering high resistance liquidity runs so the probabilities fall off precipitously once we get back to the area which the range is defined"
"once it gets back to this old low over here the market goes into what is referred to as a high resistance liquidity run anything higher than uh this price point here becomes a high resistance liquidity run"
Market Maker Activity
"you want to be buying low and selling to willing buyers above the current market action and that that's what the market makers do"
"every time the market trades down it's actually just a new low resistance liquidity run to make a run above an old high and it makes it very easy to find trades this way"
Trading Framework & Practical Application
Identifying Defended Levels
"the more price action there is around a specific level or a high or a low that is indicating a levels being defended on an Institutional price Model"
Institutional Order Flow
"you're going to see very easy trading when you trade away from that level and by doing that you're going to be getting yourself in sync with the institutional order flow"
"then your trades will find very low resistance in the form of profitable exits and very little draw down"
Bottom Chasers vs Smart Money
"what's going to be forming below this shortterm Low Bottom Chasers folks that want to be long but we understand that the market Has Broken an old high here and had real quick sudden price action very little retracements"
Real-World Example From Transcript
BEARISH LOW RESISTANCE RUN EXAMPLE"we have an old high back here and the market starts to move lower and we showed this example of price action here with this old high violating this old high here selling off these old lows being violated here and the market starts to Rally up notice there was very little resistance in the marketplace where this High eventually traded lower taking out the liquidity resting below these lows here this run from this high taking out these lows is referred to as has a low resistance liquidity run"
Transition From Low to High Resistance
"this rally up if we were buying long here we know that there's going to be a high probability that this is not going to be runan out the high is going to be intact it's going to be defended and the higher high over here will be defended"
"the fact that we keep this old high in place and every low that forms has very little resistance as each time it goes through"
Continuous Pattern Recognition
"the difference between that is every rally is going to be viewed as a high resistance liquidity run it's going to have very difficult time getting above the previous highs sometimes it will happen but generally you're going to find that it's going to have a very difficult time doing that"
"but because that's built into price action having a high resistance liquidity run here it turns into a low resistance liquidity run for you you to see a move below the short-term lows"
Every Short-Term Low Is Opportunity
"every short-term low is an opportunity to seek liquidity or the market to expand down after a retracement up to take out the stops that rest below the marketplace at every old low"
"every single low that you see in price once we identify where the market is in terms of high resistance or low resistance liquidity we can find old Lads to the left"
Support and Resistance Reversal
"the resistance levels are going to be very weak the support or lows are going to be very strong because the Market's going to be capitalizing only on the buy side"
"everything's going to be supporting bearish prices so every retracement higher sets up another price like to go lower aiming for the lows to be violated we've changed the tide here and we made an old low so every time the market retraces lower that sets up new buying opportunities"
Study & Review
Click each card to reveal the answer (from transcript quotes)