All language subtitles for 3.3 Liquidity (Walkthrough AUDUSD) 44

so up until now really kind of throughout the lessons we've really just been focusing on eurodollar uh just primarily because i think it's quite useful for us to continuously be sort of studying that same section of price action just so as we go through each lessons and we learn new concepts and then we build upon each of those concepts we can then keep going back to that same price chart and you know building that layer upon layer of confluence and you guys can just kind of you know start to get really familiar with it and see how you know sort of you can still read price action right with just one concept but then how we're you know bringing those layers in to increase our strike rate uh refinement and risk reward and so on but i think now we're kind of you know we're starting to really put all of those pieces together now i think it's useful to go through different pairs different sections of price action just so now we can really practice putting that all together and just for you to see that you know these really are used universal concepts they literally are you know understanding really truly how the market really moves and you can apply it to every instrument now that said what you will find as you sort of potentially play around with those instruments you test you know other asset classes even potentially right outside of currencies although these cell concepts apply there will always generally be slight nuances and differences sort of in just how uh potentially the behavior and characteristics of how that potential asset class or currency pair may move compared to one that you are already previously used to so that is why generally i do say especially starting out to just focus on one pair and get very used to to um you know how that pair moves some pairs you may find that you can be quite aggressive and sort of strict not strict but aggressive and more tight in how you mark out your structure so in terms of swing higher swing lows you would actually look at you know you really zoom in and kind of pick for instance this weekly chart we just zoom in you would um for instance call all of these swing pullbacks on a weekly chart right and that would be fine and then other pairs you actually may find you have more success when you're a bit loose with your with your swing structure so you would define for instance that is your swing high that is your swing though this would just be a weakly complex pullback and then that would be one whole bearish leg down right which would mean that this is just one pullback and we've actually stayed bearish the entire time now of course that's still going to differ between traders or trader but also some of you may find that you may actually need to kind of alter your approach slightly between different pairs but of course that will just come again with time and experience and just whatever way you like to do things but anyway let's dive into a pretty recent um price action and trade example that we have on aussie dollar um yeah we've had at the current time and let's just quickly run through the high time frame so weekly chart we completely zoom out and we kind of just have a quick look at what's going on the data feed on forex.com doesn't really go back that far 2006. um but roughly we can see right we took out this low we obviously took whatever external range of city was below the slow but slightly tapped into a demand zone from prior years and then that fueled this large movement to the upside right then we come back down again being in a pretty long term uh bearish trend and then around the uh pandemic at the start of 2020 we swept this large low here and it had a very very aggressive sort of v almost sharp vertical retrace um back up there towards the highs so we came up into this extreme weekly supply zone at the top which is obviously a very strong supply zone one because it's the kind of the origin of this sort of large long-term move right that took out these lows here all of this trend line liquidity it has plenty of inducement in front of it right with all of these uh weekly highs there um obviously as we came into it we built some liquidity too but what did it also do is very very subtle but if we actually just zoom in and then we mark out the prior high and then we drag that line across uh i don't think that will appear on my settings just have to quickly flick through mess around with this make this visible on the weekly bear with there we go hop back up to the weekly and what you can see just as we know with one of the main reasons why we use liquidity is to identify those zones that are created um as they take liquidity as they as they are created right we have a nice sweep zone right at the top of structure with plenty of inducement um yeah always a very high property area to look for either a weakly bearish pullback or even potentially um you know that full-on reversal or if you view this as one whole leg down then simply that would just pull back up into the extreme to form a lower high right change of character and now we are potentially trending to the downside okay i'm a little bit more uh don't use the word aggressive so i won't necessarily call aggressive i'm a bit more sort of tight with the way that i would define structure that for me would have been the most recent high that would have been that lower low and then as we came up here and we took that high that for me would have been a higher high then we come up we pull back here and then i'm pretty much counting that as one weekly leg now you could be even a bit more aggressive than me and you could count that as a weekly pullback and a break at the high and that would be more than valid as well but for me it's a bit more of a daily pullback in that in that case so with current price action um i'm essentially viewing that uh as a weekly pullback to this level and then if we have a very clear weekly uh uh demand zone down here right refined to that last candle before the buy that went on to break this weekly high uh over here which i believe yeah that's going to announce the daily i don't generally draw on my weekly books structure but there we go we know price took out the high regardless so now we are within price action we've come into this demand zone and this is a pretty decent area to look for a potential um higher low or you know of course if you're viewing prices bearish then you can still use this as a bullish opportunity to look for price to pull back potentially up into some of these regions here so then look for that lower high and beyond now one thing else do you notice about this demand zone is it did actually take liquidity there all right okay we'll have to put that down to the daily and we'll go drop down and look for the daily that's where we are with the current price section we've come down into this nice daily zone so if we take a look at how that zone was created pretty similar to the one that we looked at on your dollar right we had these equal lows and then price swept those lows here and then that fueled the move to break up higher okay so then get that larger sort of weekly break of structure so now we're coming back into this demand zone what we can start to do is refine our weekly zone right as we go down through the time frames to potentially see where price may react so there's a couple sort of zones i'd be looking here from the daily chart perspective i would be looking at this wick right that took out that low that swept that low that then led to the break of the high of course you can take the whole candle and for me the the body of that candle was already mitigated anyway when we whipped back down but also remember if you're being very very kind of strict with your definition of demand zones and technically it shouldn't be a buy before a buy it should be a cell before a buy so you can kind of use that knowledge to refine to the wick uh using that fractal refinement right for the bearish um lower time frame move that then led to that breaker structure so that would be a very very strong demand zone i would definitely like to see price come into to look for a buy but where also do we have well if we kind of just go back a little bit remember we say look left and try and paint the kind of the story a little bit to build price action to see how it actually arrived at the point that you were looking at so we obviously had this daily supply zone not the best in the world it kind of only took out that minor low there right it never actually took out the swing though it only led to a wick break but it is still valid supply nonetheless nonetheless what happened is price came into it right with this wick you can see that it reacted down right with that large doji and then we came back up and then whipped break there so i would definitely be looking um at this large daily wick zone here as a potential zone as well obviously it's pretty big there um but yeah definitely a more than valid zone so obviously it's quite big so we can drop down another time frame and potentially look to to refine it even more but before we jump down let's just take a quick look at potential targets on the daily where we have this sort of most recent supply that led to this day daily break of structure here excuse me uh that daily boss there right so that would kind of be our first target because of course we could look for longs within here and it could just be a daily pullback to reject somewhere within this range supply here right and then we could continue to come lower before potentially then go and write sweeping that liquidity before seeing the real move so that's kind of be our sort of first daily target but of course with the potential that the weekly could be putting back up even higher up to around these regions so let's try and refine those daily and weekly demand zones even more just to help us with accuracy now if it kind of you know you're not entirely sure what's the purpose of us kind of trying to refine these and and make these zones as small as possible if you know we're not necessarily looking to trade them directly because you know if we're always going to just wait for the price to come in and then start to break structure to the upside so on and so forth why do we need to refine it well good question i guess but the reason why we refine it is because the lower you go down in your time frames right so let's say we want to look for that first say m1 that one minute change your character that one minute flip to then get an entry right that's going to be happening loads and loads and loads of times so to avoid yourself you know entering in a full signal the price does that but it's just a five minute pull back to continue lower and you keep trying to catch a pulling knife and take tons of tons of losses before the real move goes because this is a huge sort of you know both of these daily zones are in the weekly zone so we really tried to nail it down to two zones here but even this daily zone is massive right so the more refined we can get these zones then when price actually comes into them that means we can um trade that first m1 change of character right or m5 whatever time frame you want to use with a lot more confidence right because it's very likely than the price is actually going to move from that refined zone so digging into these daily zones here on the 4-hour chart what can we see if we can refine the zones um even more definitely like that for our inside bar make sure i'll cover the lower lick wick i should say as possible and we can see you know that tapped into here and that was the origin of the move that then led to that flip and that break of structure um probably also keep an eye on this zone as well as that was the one that kind of last point of demand that did actually lead to the break of structure and then um this one has already been mitigated you could include the wick but i probably prefer this four hours on that stage but it's pretty much the exact same size as the daily refined wick that we've done so i'll just leave that there and you can either drag these across or a quick tip if you open them up i believe you can yeah extend right like that and it'll go straight across if you just wish to do so but um the way my chart ocd works i kind of like the zone to end where i'm actually looking at so yeah i'm just going to drag those across anyway so we can already see that that for our zone has been disrespected so we can delete that one now uh and concentrate on excuse me on this demand level uh down here so like i was saying at this stage dealing for our chart is very bearish but we're coming into right this pretty strong weekly uh demand zone here right that took the quality below that low and led to a pretty decent move there so at a minimum we're looking for a bit of a weekly bounce but obviously we can start to play a much larger move you can see that daily zone as well and coupled a couple of daily zones that we're looking at we've now come into about the eq of this daily zone and that led to the flip and break of structure there so that's a decent area as well which we've then refined to this uh inside bar right that was the origins move that led to the flip and the breaker structure and then we have that sweep zone just below which is also nice so at this stage what i would then be doing is dropping down to my lower time frames right and then just waiting for uh price to start to show bullish signs as we come into um our demand zones now of course you tend to be doing this on the m1 you can do this on any time frame that you want but as i always usually say m15 is a pretty good time frame to kind of um be a little bit more i guess safer right wait for a little bit more um be a bit more conservative and wait for for price to start to show those british signs so we obviously built up a big collection of equal those there we've broke down um below those so we can expect a bit of a pullback now pulling back into supply and going lower so at this point the m15 is very much bearish right but now that we've pulled into our refined demand now we can really start to pay attention to price and instead of necessarily don't have to wait for a bullish trend change but you can just wait for that m15 change of character right if you want to be a bit more aggressive so i'm just going to take price nice and slowly now and let's keep an eye of what's going on okay so this is where you have to be really kind of paying attention to details now another thing as well if i haven't kind of mentioned it enough so far is if you look at the time at the bottom right this is around sort of 9 a.m london time so uh utc plus one as you can see down here right that's the time zone my charts are set to now this is obviously banging over the london session and this is a great time to be looking for trading and these major pairs right as this is generally when those high probability moves will occur and you won't get full signals because volume is generally high okay so what have we done we've kind of swept these relatively equal lows of course they don't have to be uh picture perfect um but it's a nice bit of inducement coming down into our four-hour zone now change of character for me right we've had a movement down this next candle it doesn't matter that it's bullish what matters is that it never broke this count as low right so the 745 low if you look up on the top left right this will tell you where the decimal coordinates are of each candle so if we go on that first candle see how the low is 71152 and then the next candle we move across the low is 71156 so of course that means it never took out that low so that counts as a minor pullback and then we took that low so because we took the low that means this then is a minor high so this is kind of how if i'm looking at this live market and i'm waiting for that first m15 change of character i will literally just keep um drawing my line and i'll keep dragging it down and dragging it down and trying it down until we get that first change of character right so another thing as well what do we have is we have some m15 supply here right very very minor supply but it is there none the less so let's draw this on okay now starting to react which is good remember we always want to see that reaction and price is now going to try and take out the load does it take out the low not quite just yet still battling between buys and sellers and then boom not only do we get that change of character but we also get to drag this one down that reaction fell right that's the reaction point where my cursor is now we have now broken up above that and we have the change of character so we can show that as a sort of failed reaction right so what caused the failed reaction well basically anywhere within this uh cell to buy that lead to the breaker structure so technically you could look to buy anywhere within this range and maybe we want to refine it a little bit more and we want to look at this sort of last candle here right because if you think about what you probably see on the m1 is you would have had supply here that then initiated down pricing came back up into that supply and then sold off with this doji but then it got bullish again right so that's the last pivot that's the last bit of demand that led to that breaker structure and led to that change of character so if you wanted to do so or if you wanted to wait for price to come down into here on the m1 again you could then drop down to the m1 right if even when price comes in here and then again look for the same entry model and then you could buy with a fair amount of confirmation or literally you can just you know take this on the m15 and you don't even need to be that refined right you can enter on a distal or you could enter right on the eq to try and pretty much just instantly double your risk reward but of course you run the risk of not being tagged in so let's just be conservative and see how this plays out so all right just tagged in there so what you can see is you would not have been tagged in if you took the eq but that's fine now let's say you want to see a bit more confirmation you didn't just want to change your character but you wanted to see a bit more maybe kind of you know another sort of minor structure go ahead and you want to see this high go which we have now seen so now we're really starting to see british momentum kick in maybe now you've seen everything you want to see and you've got a bit more confidence um so let's you know pretend we're not in this trade for a minute or what i'll do is i'll just kind of drag this out of the way um actually i should just leave it so we can kind of focus on price action here all right so that was your first kind of entry the more aggressive one but now we've had a bit more convincing break of structure what else did we also have right we had this minor area of supply price came into it it reacted it failed to form a lower low we broke up above the reaction right um and now we are up above and we have that change of character so obviously we can set um we can buy anywhere within that range or we can kind of refine it to this candle here and then potentially look for an entry exact same thing again right you can enter on the distal you could enter on the eq just make sure it stops below or you could wait for price to come in here and then on the m1 look for a more refined entry so let's see if we get tagged in all right burn price drops around for a bit and then we get in so even just looking at the m15 price action what do we have here right i can just see probably on the m1 is we probably had to change the character back into the demand and then that would have been your nice little refined confirmation entry within there and then you would be off right and then it's kind of just a couple of ways that you could have gone in and positioned yourself long just using the m15 chart alone right um obviously you want to wait for at least that m15 to then make a higher high before starting to to think about kind of managing that trade you need to give the chance the trade a chance whoops to play outs didn't mean to go that far head back to the m15 done that on the wrong window there we go back here here we are right okay so m15 is taking off now i'm not gonna go through every kind of single bit of price action here and look at every single opportunity to scale in um or get another entry if you haven't taken it but let's just try and play play price forward a little bit here and remember that kind of first real high time frame target is to play the daily pullback up in and around this region but we can also keep an eye on some potential for our levels so um let's keep an eye on those around aren along the way there's the words i was trying to look for there um and then you know kind of have this inside bar but it was mitigated then we have these wicks here so we would have had that buy before the sale so you know there's a few weeks here you can kind of keep a rough eye on but this is what i'm saying right you don't always have to be you know perfect at picking these zones what you can do is just let price action show you the way which one does price action um kind of want to start to pull back from and then you can just basically wait for those changes of character uh and yeah just basically view it that way and let price action uh lead you the way so let's play this forward a little bit all right we're just trending pretty nicely to the upside nothing too interesting as of yet in terms of what essentially i'm looking for here right is signals that the four-hour chart um kind of wants to pull back so kind of seeing this along the way you know we won't dive into every single trade example but kind of how you know you want to be thinking this as price would be moving in the live market is obviously looking at old areas of supply on whatever time frame you're looking at to see how they initiate pullbacks but more so to see you know where are they potentially um you know forming potential flip zones because we had the reaction right this was the pullback and then if you wanted to scale in or potentially look for higher lows right this could be an area in which you could look to buy and that's essentially how i would use old old zones right in new trends see there you go and there would be another opportunity to potentially look too big even though you're high up on the leg right when we're getting that higher time frame zone mitigated momentum is often very strong and that is where you can get away with being more aggressive right buying quite high up in the leg we've now obviously pushed up above that four hour zone as well so we're just going to delete that for now but you can see right this essentially would be if i move this across we have um m15 excuse me demand that has now kind of been the origin of that move of course you could take the whole range as well but let's just drag that across potentially for uh yeah future price action now pushing up a little bit higher pulling back into demand let's see are we going to get that change of crack to the downside are we going to break down um looks like that low just about holding okay swept that low broken back up again so it's kind of having runs on liquidity here now we're pushing up in towards that four hour zone so now what i'm really looking for is just to see price action kind of really start to break down um at this point so we kind of see we've had a clear bearish trend we can't we're kind of starting to sustain that now right so we've taken out this low we've pulled back in we've broken another low we've come back in right supplies holding we've come down supply is holding again we've come down right so now we're starting to really get that bearish order flow so let's take a quicker look at how the four-hour chart is looking okay so this is a really good reaction right from our daily uh weekly and whoops four-hour zone i'm just going to drag that across generally has been a little bit glitchy and this is what i really like as well you see how sharp essentially that big v-shaped move is right um you know that shows real bullish intent stepping into the market and whenever you see a v-shaped move come back to your supply zone that's not really a good sign um that your supply zones are gonna hold you might get a bit of a reaction but obviously um yeah we're looking pretty bullish at the moment excuse me so at the moment we've come into four hour supply so what do we expect we expect a potential pullback you know we can start to get that four hour change of character and we may start to pull back and at any point we want to be looking for where that four hour higher low is going to form so we can then look for a pro trend move to either first position ourselves in right if we haven't already taken this or look for potential more scalings to really build on this position right because at a minimum we're expecting the daily to pull back but with the potential right we could get that weekly move and obviously the daily then could switch bullish so we're still very very early on the move here so obviously we could look at price coming all the way back to the origin um and you know i would look at that if price came back that deep but it's probably not that likely especially at the start of the move with this amount of momentum so clear for our zone would be this area here all right let's just be a bit more unrefined and look at the whole range because we would obviously look for lower timeframe confirmations um as we get into here and then we also kind of have you know this move here right where price has moved into it pulled back and gone it's not super clear on the fire charts i probably wouldn't draw that on um but let's have a look in the 15 minute yeah that's kind of you know roughly that area that we were looking at before right came into this area supply it pulled back and then broke up higher so what are we looking for is kind of any of these demand zones for a price to come in and see how potentially they start to react now even if you weren't using spider-man as i always say remember you don't actually need it of course it helps us but all you're looking for right is for bullish size to start coming to the market again m15s obviously switch bearish to facilitate that four-hour pullback we want to catch that four-hour high low how do we do that you know what do we use for confirmation we wait for the m15 to start to switch bullish and so show potential bullish signs okay so what time is this around this is kind of around the asian session right middle of the morning in terms of london time and then we start to break strategies upside so this is around 7am so frankfurt open and this is where i'd definitely be at my desk at this point and i'll be going to myself okay right we obviously switched bearish to have that pullback we're now switching bullish with a hell of a lot of intent on the m15 right that's nearly a vertical move now even if you hadn't i've drawn this zone on your eye and you haven't you know been kind of you know following price action the whole time and even drawn on you know this is the point i always try and make is if you come to your charts obviously session time in good time you want to be looking to catch a high low and you just see this move here and you have nothing drawn on just look left go okay what did this move originally from okay there's obviously this candle here that you know took the size here and then you can you know work out and say oh that's actually you know it took it caused that four hour supply reaction to fail yeah that's a pretty good level um you know it had uh you know it took liquidity from those equal lows there um that's a pretty decent um sweep zone it's mitigated the prior range so actually we follow the bullish order flow this was the last cell to buy range that hadn't been mitigated right for price to come down to but then we had then this what massive support support flow here right that's another um real decent bit of inducement you know you can even have that kind of descending trend line like that right we just know tons and tons of liquidity is going to be building um below here what else do we have we have big equal highs up here to target right so that's a pretty poorly formed swing high so what do i mean by that generally you want to see a nice swing high like this right shot move down shot shot move up shot move down here it's kind of just you know messed around and then slowly drift away what does that mean it means it's leaving tons of liquidity for price to target um you know we also have this descending uh trend line here as well right which price is then obviously trying to sweep uh we also have that descending trend line here you know you can draw it on everywhere right it's not super important to do this it's just to understand kind of what is actually going on there so we sweep all of that we move into this real nice last zone but more importantly it's the aggressive in and out showing big money is in there but we don't just look for aggressive moves what else do we wait for we wait for a change of character right in this case pretty much i would probably classify that just have a look highs yeah that's that would be a bearish trend that for me would be a bullish trend change not even just a change of character oops wrong one so now the m15 has switched bullish what else uh what also happened well we had this pretty clear m15 supply zone all right let's buy before the sale that led to the break of these lows here price came into it reacted remember how key the reaction is that we need to see and then we can draw that reaction there where that reaction then ended up failing and then we have moved right to the upside so now i've seen pretty much everything i want to see to give me high confidence that the four hour high low is in place yes we haven't pulled back to where that kind of clear for our zone was but remember we don't have to this for me is super super high probability regardless of all of that you can see the price actions going in and i'll be pretty confident now trying to look for potential buying opportunities of course we don't want to just buy straight away we want to look for price to pull back so where are some potential you know areas price could go back to it could come all the way back down to the origin down here right that's a pretty decent move you know there's even kind of a fractal zone here where we had this movement down right you can see price pulled back up it came to the low price came back into it right it reacted and then we moved up so yeah that would be um a pretty valid zone as well but you know what do we know about zone refinements um we want to look for ones right that you know took liquidity um and that actually led to where you know that that that flip that last point of um supply that failed and where we got that trend change so yes these are valid and if price came down to here i would definitely um be more than keen to look at them but i wanted to kind of concentrate on more recently where that move came in right so we can see that reaction we can see it failed so we could take that entire reaction like this or we could refine it right down to the bottom here right because what happened price took the liquidity right from below here and that led to that break of structure obviously now we've already tapped into that a little bit so we can refine that to the wick here and then what does that give us that gives us some inducement above the zone all right now we can look to set a limit entry order below here because it's very unlikely price is going to want to break this low here um if we are going to continue right so you could probably even get away with a 2.5 pip stop there more than enough buffer just below that zone there and that is looking like a pretty decent move so we've taken liquidity we have inducement we have caused a failed reaction right we've caused supply to demand supply to flip through demand and that led to a trend change so all systems go to then look for that entry for price to come in and then yeah i mean when you get the zones right and you pick the right pois um you know it's not surprising that you end up seeing those large moves as all of those orders are filled um obviously we had a bit of inducement um on top of that it's quite far away from the zone so i wouldn't really be you know that's concerned with that but you can just see what's going on here right the lowest get taken big sweep um but yeah that's just pretty much it in a nutshell um pretty much a picture-perfect example of how we combine those liquidity concepts with supply and demand with market structure how we position ourselves understanding what's going on as price is putting back what we want to see to confirm the four-hour high lows in place and then starting to you know obviously identify multiple valid areas of demand but if we want to start to kind of really refine those right we look for the ones that took liquidity the ones that have inducement in front of and that's where we can get yeah pretty um accurate results obviously you've got you know just up to the next sort of swing either you've got 18r but of course if you have done all of that hard work to position yourselves in the first four four hour higher low all right and what could be a weekly move you are golden you want to try and hold on to this with as much volume on your trade as possible and really you know try and swing this higher right um and just see really yeah just how far you can push it because this can have a lot of potential especially when we start to take out um you know that first real daily supply zone and now we've had a daily higher high um yeah now obviously what we expect is a daily pullback for price to form a daily high low but you should be pretty golden and price not coming much further than that and continuing so on and so forth so yeah kind of just wanted to go over that that was a really nice uh clean trade example um of everything then they're combining all of the concepts that we use right um with liquidity now into our market structure into our structural and flip zones and just really using them to to add those extra refinements but of course i will say again it's really not necessary liquidity um if you're at a point where you're finding it confusing or it's making you really kind of scratch your head and doubt zones that you're looking at before just leave it for now concentrate purely just on supply demand and market structure um but yeah as you go along and you start to kind of focus on this a little bit more it can really start to help you um yeah just potentially stay out of some traps and give you a bit more confidence for zones that you are picking if you see yeah then do those liquidity sweeps and have inducement in front of the zone so i'll leave that there hopefully you guys take some value from that and i will see you in the next one