Original subtitles

plenty notes as always try and draw these diagrams yourself

this over as many times as you need to make sure you take

just look at as many trade examples as possible so watch

it could mess around and go off so what we can do in that

go and just do yeah real nice slow walk through on the charts

maybe you want to pay yourself right so you can take some

high but not every time we we we get into the trade is it

and it will really help to kind of fill in any gaps in your

leave that there in the next few lessons we're now going to

together paint everything we've kind of learnt together now

when in the latest lessons we start to think about management

of how you can use this concept you know if you're in a trade

Mone would sweep that it would pull back and obviously then

taps into you know the the liquidity that was behind the

when it sweeps it it's likely to have a steep pullback and

whoops we do want to target right we're long down here

ideally right this 4 hour week swing high to get that higher

structure you see a prior high that's when price will break it

I guess I want to add is just remember whenever we get a

in your trading right so yeah you know if you're not

simple as I personally believe you should try and and keep it

knowing what direction you want to be trading in then

were from demand or induced buyers if we're going to sell

hopefully continue so yeah just kind of bear that in mind now

high and that's when we get the pull back right same thing

liquidity just in front of it to induce right sellers if you

identifying your supply and demand zones either via a break

creating equal lows here these equal lows still haven't been

more important is everything came before the the liquidity

yeah hope you guys took some value from that and I will see

knowledge that maybe there that you weren't quite aware of so

and just start to kind of put these pieces of the puzzle

with just that final little tweak with liquidity yeah and

you know bigger double bottom right it'll be more of that

swept but then it's also just creating that larger kind of

then does come down sweeps all of this liquidity taps into

of it okay so even in this case what you'll often see is you

all day you'll you'll never end right because it's it's

concepts into our trading in as many ways as possible so I'll

another demand zone and then we get the real move okay so yeah

know use that to your knowledge that when price pulls past that

know there will be minor demand here right because you know

liquidity is all over your chart you you you'll be drawing

high and this would become our next high low so yeah hopefully

new swing low at that point right and then we'd have our

meantime let's say we're running you know really decent

profits and we see some nice equal highs over here right

which is kind of poorly draw a dollar sign there you may you

going to do that straight away right it could come down lower

reject any demand zones from along here but obviously in

what I mean you know when you're looking at internal

yes we do want to target that you know if we've got long here

sweep of liquidity generally we will get a pull back so that's

know I've ranted about this enough before but just to

orders are building within here some of price comes down into

action here where we we got our entry model and we see these

series of mitigations with all of these lower time frame

demand zones what is that doing well you know what would that

it you know we we could have formed a high low here but more

that demand is then filled and then what's that doing it's

this is where some demand stepped in pivot demand to lead

so one right we see liquid liquidity get taken as it

keep your charts as kind of clear as possible just so you

when you're practicing and you're just trying to get a

near our zone right in front of the zone really that's kind of

what we're most interested in you don't need to kind of go

looking for you know is there some inducement you know quite

identifying if a zone is a sweep zone or not and two just

everywhere it can also be quite subjective in terms of if you

use this liquidity concepts within our trading because like

try and be you know using it in in in very kind of refined

just now and just focus on those two concepts because you

two types of zones even more by just seeing if they took

into them from supply right and that's essentially it you know

these lower highs there's just going to be tons of orders all

yeah on the way down so remember all of this price

below these zones here taps into our you know origin of

be the origin of the move that actually led to that break of

time right anyone is trading this range a lot of people

full of orders some people refer to this as a liquidity

ascending trend line but what that is kind of in reality is

is going to move back up so this movement here is

liquidity right as people starting to sell behind all of

section where there isn't price hasn't moved into yet it's just

again we get the same entry model right failed reaction so

modules right getting your market structure right first

thing happening right and we pull back potentially we have

flip chalk pull back in and then we can start to target

knowing where your true swing highs and swing lows are

it's just happening fractically all over the market but what's

can really be focusing on the price action that is occurring

actually trading the live markets you do want to try and

of the zone even more two we then have inducement in front

that had built up right and now price comes up and it taps into

all of that supply obviously demand is still powerful at

building up above this four hour spring range the entire

which is then again access inducement yeah for the same

again it causes the reaction to fail and then eventually we get

these moves here all of this pull back it's going to

you know it's good to do that but in reality when you're

move and in the theory we can then try and get another high

new swing high and then obviously price could you know

this trend line holding right people look to get long here on

potentially there may be a very minor pullback on the way up

going to then use that liquidity again to trade

structure so this would actually become you know our

our extreme demand zone right because essentially this would

liquidity behind this high we pull back that then leaves a

partial profits off the table pay yourself just in case price

within kind of this whole range right or you know the opposite

I'm going to want to get short and they will sell they will

tons of liquidity building up beneath those demand zones

wider stops it's not just going to be you know one

then facilitate that pull back right using prior liquidity

about the reasons why you know how how we can use those

double top then build equal highs there right price on the

but I just kind of want you to start you you know thinking

again we can talk about management in a lot more later

now is starting to take control as we start to break these

money that's stepping in here in the strong demand zone

trading so yeah that's pretty much it the only other thing I

an equivalent sell order so you know the theory is the big

should then introduce sellers into the market for this large

really do not need liquidity it's just kind of just yeah you

kind of give you that little extra fine tuning to your

lows and they're going to think okay if those strong lows go

know advise you kind of don't worry too much about liquidity

consistent or comfortable with just market structure and

kind of as simple as I can try to explain it and kind of as

going to be full of orders all of this white space is just

trend line liquidity sweeps that minor low there and then

induce sellers into the market right so anyone who's kind of

on this I imagine oops move this off out the way get nice

supply and demand on its own I definitely would kind of you

so this is where that strong swing low should be holding

pull back so again when we come down and we sweep this minor

zone a structural zone and a flip zone this is a kind of our

would have been created from a minor leg alright or it may

break of structure and the failed reaction so it's a sweep

the third bounce but it just breaks down through sweeps that

generally when you are looking at you know this M15 price

we can just increase the probability of either of those

of structure or via a flip zone or ideally both right and then

liquidity when they were created and or if they have

just kind of just so you understand what's going on so

to that break of structure so then when price comes back to

equity sweep for price to pull back or of course potentially

internal range and external range equity it doesn't really

scenarios and those two scenarios are one for

low it facilitates the pull back to kick in and it gets the

exact same thing so as we come down into this four hour sweep

often than not you'll just see a bit of a small reaction as

and then eventually that goes right and then we're off so

feel for for at how price sweeps it and then it reverses

kind of classic horizontal support level that's holding

everywhere right it's behind every single structure point in

around and draw an order this trend line equity of course

have you know a more accurate one would be would be a bit of

the market but more what we try and kind of use this for is we

overwhelming imbalance between supply and demand where demand

the pullback okay so you'll either get the demand zone in

inducement in it so then as price comes down it sweeps that

creates a zone that then you know increases the probability

fact let me just draw it on so you can see exactly what I'm

that's starting to make a little bit more sense of how we

minor breaks and structures to the upside we tap into demand

I said at the start right liquidity is literally

demand to then buy against those sell orders buy into

start kind of using these lines right to draw where you think

there's loads of sell orders in that area which in theory

know within the swing high and the swing low is essential

deadline below it there's just going to be a ton of orders all

liquidity that was built on the way up okay so all of this is

theory that big money to then sell into and continue that

this we've just drawn it with price coming all the way down

to the extreme it sweeps all of the liquidity that had built

right this is you know as good as it gets essentially in

zone right remember it took liquidity and then led to the

look like if we just looked at candles like a bit of an

right as people are getting long and what not right tons of

facilitate the pullback right so literally the minute that

looking to break out on this level so there's tons of

things if not both it will either be reacting to a prior

hour swing high so eventually when price breaks that high we

liquidity up here price will then eventually sweep that and

still have you know stop losses above the highs or people

sweep that external range liquidity right that have been

this point overpowering it and then we eventually get up we

void right and eventually what's going to happen is price

essentially then filling all of the orders within the space

liquidity when it was created and broke demand and structure

price then sweeps a high moving into that supply zone that for

price then sweeps that high and then we get that failed

talking about so we'd rather have say an M-15 demand zone

for example right and also imagine that that demand zone

a 15 -minute low right just like this low here it will most

minor pullback building liquidity above that high as

back for a lower high generally be doing one or one of two

reverse so yeah it's kind of just the difference between

building up in this area right this whole empty bit of price

the change of character creating our flip zone

generally be creating you know some sort of trend line

that weak 4 hour high right and that whole time right all of

tapping into the external arrange liquidity that has been

building up the entire time price has been pulling back

eventually that facilitates that pullback so later on you

jailbreaks it fails to take out the low demand then steps in

we pull back that demand sorry that the supply fails to do its

put their sell stop order on the break of it right so

against but eventually you know there's going to be that

those sell orders right for every buy order there must be

takes that high so we get that change of character right that

below these lows right obviously some people can have

of that there are going to be people who see those strong

don't know when it could literally be a pip and you will

the double bottom right likely to have their stop anywhere

and small there we go so anyone who's say essentially long from

equality being tapped into that's built up here that

more of a minor minor pullback there and then again another

essentially you know external range so internal range is

see this you know even a micro pip it breaks and then it can

are looking to potentially get long or for traders who are

happening of course is if price then sweeps that liquidity

behind the high and the low so after we get you know that

break of structure generally that will be a sweep of

it builds up that by side liquidity for you know in

trying to catch that high low and that protrend move we then

getting long from this double bottom already right if we draw

highest property zone and it's at the origin of the swing move

low there it taps into demand and that will facilitate the

likely be sweeping that low and then that will also facilitate

right there's going to be loads of liquidity building all up

pullback or it will be imagine there was a minor low there or

know when we get that break of structure over here right again

start of the diagram what do we have we have this thick grey

continuing that bearish internal trend and then price

going to be tons of liquidity sitting externally and then

the charts in the next lesson or two so starting off at the

demand zone right in this leg here to facilitate that

action every time we get kind of get that reaction to pull

entire time and then that starts to you know provide that

make a massive difference in term of how you define it it's

of liquidity behind that high and even on the pullback as

look to play that four hour pullback what do we have we

there then we jump down to the M15 right and we can start to

that is broken that is essentially that external range

above the top of this range right at top of top of the four

liquidity and eventually we'll get a pull back so in this case

in this diagram it's obviously a very exaggerated movement

after we get that break of structure obviously there's

everything between the high and the low external is obviously

classified as internal range liquidity and then any

pull back down here now as we're pulling back what can end

up happening is we can start to sweep all of that prior

you can potentially make right okay pretty much wraps up the

potentially blind your retinas with my white charts alright so

second warning to reduce your screen brightness if you are

something to bear in mind as you start to progress and

will create us a pretty decent sweep zone of course when price

then goes on to break structure so we build some more equal

reasonably strong internal low and then what can end up

liquidity behind those swing highs and swing lows is

decent amount of liquidity below this low right for who

internal range liquidity any sort of liquidity that is you

minor well not minor but with that minor high we have a build

structure to the downside and yeah and then again build some

our supply zone right to then facilitate that next pull back

lows here before price actually goes to break structure bit

looking to sell the breakout of that what should be you know a

to the downside there's then inducement in the leg right so

well and all of this acts as inducement for what inducement

for the supply zone which is a sweep zone because it took

reaction and that change of character that break a

the exact same thing right we get an internal lower high

internal structure right so imagine and then price back it

creating a higher high so that means that there will be a

this example price turns back pulls back right with this

for a zone you know below or above it now this concept for

price delivery you know back to the zone it's not super super

where that zone was created that ends up being inducement

forms an internal lower high it then takes that low right

facilitate a pullback right of course we could drop you know

zones when we are in a British trend generally they will

produce and facilitate that pullback now in this case in

previous supply zone what do we know about previous supply

go on to reverse but generally old zones are there to then

we should be you know pretty familiar with this diagram by

pretty much every single listen so far so yes this is your five

theory so what we're going to do is we're going to hop on the

you're just looking for those you know extra refinements that

that you're looking at. However, in that final third

and eventually break down and sweep past it where essentially

right and then that fuels the move to the upside then that

have that pullback into demand price then pulls back up again

correctively then you can see in kind of both of those first

broken generally you will see some form of reaction whether

line as the four hour chart price moves up it pulls into a

it's a full reversal or you know just a pullback. Now one

clear cut trading example before we're going to hop on

concepts that we have just gone over alright in this theory

liquidity behind every single structural swing point in the

now and all we are simply doing is just applying the liquidity

and a lot of the price will then just disrespect the zone

straight back to the zone, not always, but a lot of the time,

mitigated. So these are the types of pullbacks that you

for price to sweep into the zone but then also for to

two examples how liquidity is being built up as inducement

break of structure we expect to pull back why well because

lower high so that's why we always say what happens after a

sweep that and it will start to pull back to then form the next

first initial minor breaker structure to the upside

lesson and we're kind of just looking at a bit more of a

liquidity sitting below the price swing low price will then

kind of other thing to consider when looking at trading from a

infamous price action example that we've been building on

sitting in a dark room because we are of course about to

market and that's why every time any piece of structure is

charts just to look at kind of you know one last thing our

personally wouldn't massively worry about this too much at

all especially when you're first starting out but it is

can you know potentially help to boost your strike rate so I

important but it's just an extra piece of confidence which

price is swept liquidity from the prior swing structure so

created, if price then has a sharp, almost vertical retrace

example, if you see a V-shaped return, where after a large

generally want to see when price is returning to the zone

target for price to then go on to take after the zone has been

this is not a good sign, because there is no inducement,

pulling back to the zone. So always ask yourself how is

price being delivered. If price is pulling back slowly and

impulse in price, you know, where that sort of zone was

particular zone is the nature of price action as it is

trade that countertrend pull back okay so there is literally

now we want to trade away from that and that's why we can then

that so we want to trade the following bearish move so then

1 mapping for true breaks of structure I want to see the

candle closure because that means now that you can

back below inside that bearish swing range so this means that

it was just a wick break and that's why I prefer to use type

started that new bearish trend price pulled back up towards

price could sweep it before the real bearish move started but

the downside to form that swing lower low there will of course

always but a lot of times it can be now remember we always

set up for price to now commence that next bearish leg

desired direction so what does this actually mean in reality

sweeps and do not necessarily you know predict that price

it just a sweep and grab of all of that liquidity that had been

understand what's going on where you just get a wick break

high price then eventually try to break out to the upside but

tons of buy side liquidity building up above that swing

because if you are always anticipating and you just

when it will or won't be used but we can assume however that

if the market is trending, then we just assume it will continue

Liquidity is generated all of the time. We will never know

demand in its way to stock price because most of those

sitting below that trend line to then rebalance price. Now,

their stop losses below that trend line that is now forming

on the daily chart on your dollar that we've been looking

react to this and then you didn't take the next valid

reach the supply zone accepting the risk that you could be

models to get short so in this case you were initially aware

you were happy to take that first short when price first

liquidity and when this happens this is a very high pob ability

structure right if you're using type one it was just a grab of

swing high so what this means is there was no true break of

liquidity pull behind it but like everything it will come

get short but then price ends up pushing higher and actually

the left so that when price comes down and it sweeps that

terms of whether you are happy to trade and get short from a

waiting for liquidity to be swept first then this can mean

supply and demand price will then start to sell off

that then causes an overwhelming imbalance between

when price then you know continues that bearish move

want to trade away from sweeps so when price in this case when

that very often can just be a grab of liquidity of course not

the market when this is happening they will likely have

buy side liquidity and the exact same thing occurs in a

inducing buyers into the market just in front of that new sweep

mitigations right as bullish order flow is holding with

right and there will also be plenty of breakout traders who

this demand breaks up higher pulls back to demand breaks up

demand being respected each time so price pulls back to

bullish market on the right hand side right but we have

building up as big money then stepped in that same day and

there was no true break of structure to the upside right

swept out but then when the sweep does happen you then

the swing high right for quite a number of days price was then

swing structure to the downside this time to then create a

would then be short or looking to get short because they may

because it's grabbed that liquidity to fuel the next move

to the downside so then again you can look for your entry

supply zone alright again for the big money to then sell into

strong sweep zone then after we have that new lower low price

previous internal high but then the big money steps in using

back here that's in the orange circle you see how price pulls

starts to break structure to the downside to form that lower

right on that first pull back a sweep zone is created because

side right where we have this bear structure you'll see how

the internal structural high is swept before the real move

low so again if you look at that first initial swing pull

price pulls back to form a lower high but in doing so

and it targets the sell side liquidity below those equal

from that supply zone to then sell into right as that zone is

swing leg but it doesn't have any inducement in that leg so

inducement concepts when we combine them in the market and

previous minor supply zone now that minor supply zone I

swing range without the candle actually closing above the

take that trade if you of course you are happy to trade

and correctively and it starts to react and sell off from the

was created so now as price starts to pull back to the

this case is now a sweep zone it's a sweep zone because it

of relatively equal highs so there is a lot of buy orders

have been liquidity sitting below the previous swing low to

right continues downside from here and it breaks structure to

zone and inducement this example here is a very typical

course you combine this with all of the other analytical

create a strong supply or demand zone so when you see

will or has to sweep at first before price may move in your

situations so my advice is to always react to liquidity

with time and experience in how you wish to approach these

it's swept to the upside we then want to trade away from

sweep zone very simply it's just a zone that takes

that you will very often end up missing trading opportunities

strong and it will be protected and price will not trade higher

structure and then reverse the other way then breaking down

through structure or you know taking out another zone to then

tapped into and the big money then steps in and and rapidly

being induced above those highs right for then the large money

behind those highs however if price is bearish and that is

highs and utilize the liquidity pool that is then sitting

smashed price back down so that the daily candle then closed

when price breaks up it sweeps the buy side liquidity that was

haven't drawn it on in this case but you can see how there

shopping around just below that swing high which then led to

equal highs just behind that supply zone, obviously, that is

at in all of the previous lessons whereby the daily had

that is structure is far more important than liquidity.

took liquidity so you know if you were to try and define a

to do that. So, in this case, if the market is clearly

setup that presents okay now you may remember this example

this is just another thing that we can look for when those

us that large but also that sustained price movement that

zone price then sweeps those highs taps into the supply zone

creating another supply zone that blue zone there which in

supply and demand is still big enough to cause price to break

utilizing that buy side liquidity to take the other

this is an extremely simple but very very important point and

rapidly moves to the downside it can then move pretty freely

to then move down and sweep all of that sell side liquidity

the orders have already been filled which essentially has

second method that we use to utilize liquidity concepts with

increase their probability and strike rate even more of giving

it needs to have taken out another zone right a flip zone

Sweep zones are essentially just another way that we can

in the market. Now we're going to take a look at the

of those equal highs you knew there was a possibility that

concepts that we have looked at so far so if we now combine you

know both of those equity concepts together both a sweep

types of zones are created is essentially whether or not they

to trade from them okay so again we're still looking for

previous demand zones have already been mitigated right

sell side liquidity building in front of those demand zones now

aggressively to the downside and there will be almost no

then sweep those highs and it can retrace back inside the

from that level right but then what can happen is price can

figure this out with time how you like to trade what works

overview of the theory behind using liquidity for inducement

and the risk that you will need to accept before you enter and

you out of your position that's okay it's just part of the game

sweeping those equal highs behind the supply zone stopping

zones to either break structure or take out another zone right

we can look for in those zones when they are created it to

so these sweep zones here they are still based on structural

well let's say your entry model sets up in the supply zone you

actually cause price to sell off and actually break that

buy side liquidity that had just been built up between that

high to then form another higher high tapping into that

case price then pulls back up and it sweeps that internal

ready to form that swing lower low right they think it's ready

engineered or created for the sole purpose of inducing by or

probability and the strike rate of these zones playing out in

example in the market where you see liquid building in front of

care and the reason why is because what I care most about

sellers into the market, right? In order to create liquidity

supply level like this when you know it has an obvious

now this is something that will be for every trader you know in

supply zone or demand zone right or looking to trade

they should kind of be a minimum a minimum requirement

in my opinion for looking to build a trade idea around the

those are the two main methods for validating strong zones and

lows so here is another common example of sweep zones and

in this case when price is trending so on the left hand

moves down as it seeks more liquidity to rebalance price

the swing high then we can assume that that swing high is

zone whether it be a swing point relatively equal highs or

a trend line either way whenever you can see that there

not a because price could of course want to sweep those

of course we have you know the two main methods for being a

necessarily a strict requirement it may be in your

that I've done on this is that when you actually see such an

to break the low and as this price action is occurring tons

what happens is price only has a short-term reaction it fails

right below the equal lows and above the equal highs so then

would be one right from that minor pullback in that bearish

bullish and price pulls back up to a supply zone, if there are

their favor for a little bit but then it suddenly just you

stops them out of their position before price then

because there will be many instances where traders get

money will be entering the market in those areas to sell

and then when you see liquidity forming just in front of that

where then the big money is then triggered into the market

that is actually the case but to be honest, I don't really

front of a key area where big money is about to step in and

is that these patterns in the market are essentially formed

side of their sell position however the imbalance between

to the downside and take out demand to the downside right

manipulated by the market or whatever but a lot of the

building up just in front of that high time frame supply

cleared out those demand zones so you know when price then

to without experiencing terrible slippage because

a way that we can essentially view the order book but on our

sell at because there are enough buyers for them to sell

level above those equal highs in theory this could likely be

tell us well using that knowledge that there is likely

trending to the upside right it then starts to build liquidity

this manipulation occur in the market when a zone is created

angry, pissed off, and probably confused as to why this has

know rapidly reverses against them and stops them out both of

line so that when price reaches a really strong supply zone

will be looking to get short on bearish breakout of that trend

you know refine our supply and demand zones in the market. So

them or when breakout traders get long right when those equal

we want to see when price reaches these zones and we look

they're the two main ways flip zones or structural zones but

directly off it so it needs to be either a broken structure or

highs and in the final example if you are looking to buy the

against to sell against that buy side liquidity okay so

little bit of profit before price then pulls back just

likely be a ton of buy sides equity building up then that is

also have a buy stop order somewhere above those equal

higher right but anyone who who is essentially still long in

break and retest of those equal highs then you would set a buy

remember again for every buy order there must be a sell

increase the strike rate overall So that's a brief

our actual trading which is something called sweep zones.

plan it may be it may not be in some of your plans right you'll

and liquidity like this in front of a zone it's not

limit order somewhere above those equal highs right for

you are short from that double top you will most likely place

on the breakout so they wait for the break and retest of

same double top, the same equal highs in the market but looking

that is often refer to as a bullflag that some of you may

another common example is where you will get a series of

below a key supply zone you will find that it increases the

a supplier demand zone this does tend to increase the

theory you know the whole school of thought behind this

will be a pool of liquidity a collection of buy orders just

so that means that your stop loss order is actually a buy

right above those highs in the market so in the first case if

highs right and remember if you are short and you have sold

these scenarios lead to those traders placing buy orders

moon and they want to get in long on the breakout as these

might think that if price can actually break up through that

as a strong resistance level and so they would sell and get

take the other side of their trade. So, imagine if we have

structural levels in the market, they formed just in

stop hunt and you know, complain that they were

highs or lows in this case many traders would call this double

let's take a look at some examples to explain how this

amount of volume so a large amount of liquidity to take the

fancy word that you know has been bounding around the

scenarios all have one major thing in common. All three of

zones. So, let's take a look at the first method which is using

to trade it in a different way. However, all of these different

of how, you know, many traders could all be looking at the

then pulls back correctively forming more buy side liquidity

reverses back in their desired direction and moves without

price charts instead and we can start to pieces together with

these the traders are probably then extremely frustrated,

are also bullish but they want a little bit more confirmation

theory can work in the market so one of the very common

and not break higher now other traders would see those equal

the market right so traders would see that price has failed

you will get filled at an unfavorable price level so

at these very obvious points in the market right when everyone

a ton of buy side liquidity sitting right around that price

stop order in the second example if you are looking to

then if you get stopped out you need to buy back your position

who needs to put a huge order through the market you

other side of your trade because otherwise you're very

of your trade. So remember for every buy order there must be

trading space in recent times and essentially all it means is

and the second method is to use liquidity to identify sweep

strong resistance level right so if price can get above that

that level, right? Of those equal highs for them to then

buy at. So, that's just three simple but different scenarios

be aware of and then finally, you may have some traders that

within our trading. The first is a concept called inducement

double top then they think that price is going to go to the

where liquidity will be forming up on either side of the range

be magnetized towards it to seek those pools of liquidity

relatively equal levels in the market so now we understand

identify where it is sitting in the market and why price will

liquidity pools to tap into those resting orders in the

market to then rebalance price so what you can do is you can

into the market causing an imbalance in price and then

relatively equal highs or lows they do not have to be

likely going to experience you know really bad slippage and

highs in the market but they may be bullish overall and they

on but the point is is that it's a pretty obvious level in

patterns that occurs in the market is relatively equal

between supply and demand so when you also have you know

selling a descending trend line liquidity of course will be

in order to rebalance price whenever there are imbalances

to induce or to lead other traders to take the other side

an equivalent sell order and for every sell order there must

liquidity for inducement. So inducement is really just a

know there will be resting liquidity pretty much behind

so how there's you know multiple reasons for why we

always there just behind where that swing point has now formed

on our charts but of course they also come in you know

slight different variations like this where we don't have

the three main types of sort of ways that we identify liquidity

price charts where price will be gravitated towards to tap

to capitalize on and make profitable trading decisions.

more of a momentum shift where liquidity will still be

to rebalance price. So now the question is, well, you know,

but again those are both just based on the concept of

what liquidity is in the market, we've seen where we can

into those orders to tap into that sitting liquidity for

this is where price will then move to seek out those

building up above that trend line then eventually an

of liquidity is now building up on both sides of that range

there will also be orders just resting there behind those

taken into that bearish move and of course the opposite is

structural swing points simply because price previously

back then it forms an internal lower low right so many traders

into price breaking that high to the upside now of course

think that the swing lower high is now in in place and price is

to start to break structure to the downside however in this

the other side of that liquidity right to then

perfectly equal highs or lows but you know what you can call

price to then fill and rebalance itself so those are

diagrams you can think of those as kind of you know like

just listed so traders will have stop loss orders behind

perfectly equal but when you get this such as you know a

them as well as traders looking to play a potential breakout of

focusing on within our price charts so if we look at swing

newly created sweep zone that blue zone it pulls back nice

to take out that swing low and if they wanted price to keep

created you know whether it's a swing high or a swing low more

zone right? So we have zones and we have flip zones and

structure or you know even any sort of structure created in

is. So if you remember what those are that a zone either

took out and swept liquidity behind those equal highs as it

liquidity when it is created so essentially price will sweep

below the swing low, right? So, if they were looking for price

needs to break market structure or it needs to take out another

think of those dotted orange lines drawn on here on these

double top or a triple top for example there will be loads of

orders going to exist for a multitude of different reasons.

going to have their stop loss just below the low and anyone

and flip zones but it's just an extra piece of confluence that

every structural swing point in the market and price may

eventually seek the liquidity behind those structural points

below the swing low or just above the swing high and those

in this case buy side liquidity is building up above those kind

these are often very high probability zones when of

setup that we will very often see in the market so Prices

for you and what doesn't but in general they do definitely

strict requirement for validating what a strong zone

actually tapping into those orders that you know were

are not looking directly at the order book then how can we

reversed and turned away from that swing point without

actually spot where there is liquidity lying in the market

be a very useful tool for us to use in our analysis but if we

and then provide fuel for further market moves. So,

identifying liquidity in the market, you know, can obviously

below that swing low, right? And they'd be looking to get

reality. So, what I've found is with my experience in the

market and the extensive testing and data collection

the desired direction so kind of having you know inducement

is whether or not the actual concept, you know, works in

true as breakout traders would also place a buy stop order

going down, then, they would have their sell stop order just

trade breakouts, they would have their sell stop order just

have no idea or you know, I have zero proof whether or not

for large players to then buy or sell into. Now, I personally

probability of these zones actually playing out now the

other confluences that we use to realize that potentially big

returns to those zones. There is another tool and concepts

magnet for price to be attracted to because after

then happened and you'll often hear people refer to this as a

identified a very strong supply zone right this grey box here

those equal highs that level breaks and prices moving in

times, the reason why is because those obvious

short from a double top and they be running you know in a

order so they need to find buyers to actually sell to so

get triggered in on the breakout to get long you will

structural liquidity in the market that we're going to be

essentially just viewing this process on the order book via

orders may be sitting in the market and where price may

an area that big money is going to want to step in and

price to tag you in so what does this information actually

these liquidity pools to tap into to try to rebalance price

can see these levels where you can see where there will very

that we can then use that to our advantage when price

the market once that market structure has actually been

help us with direction. So whether price is bullish or

equal highs can also look like a very common price pattern

big imbalances in the market, prices then constantly seeking

your stop loss order somewhere up above behind those equal

those huge shifts in supply and demand that have caused those

gravitate and move towards and that is of using liquidity

obviously going to want to do where there will be a large

twice to break up higher above that level so they may see this

be an equivalent buy order. So if you're a large institution

trading this a liquid market let's just say you placed a

an equivalent buy order for a trade to occur so if you were

those huge imbalances and shifts in price and therefore

of the all of the liquidity at the nearest ask price and price

with an equivalent sell order and vice versa for every sell

short because they hope that price will sell off from there

Well, there are two main ways in which we utilize liquidity

top but of course you can have triple or quadruple tops and so

magnets in the market you know there are all areas on your

you know those pools of liquidity they will starting to

rebalance price at a fair value. So The aim of the game

the price action on our charts. So we use market structure to

be building up below the trend line and then when people are

that we are playing by using technical analysis is

bearish if we are trading with or against the trend. You know

overwhelming amount of supplier demand will eventually step

building behind them or we can have you know a range forming

how do we actually utilize these liquidity concepts for us

those levels and the same goes for the trend line as people

show us where large orders have entered the market to cause

where orders may potentially be left sitting in the market so

were using premium and discount tool to help us with that. Then

orders sitting behind them for the exact same reasons that we

are you know buying and ascending trend line so orders

price charts so far, that's what's happening, right? We're

every buy order in the market to be filled it must be matched

the price action, right? Via the candlesticks on our charts.

just above the swing high right if they wanted to get taken in

see those large imbalances between supply and demand in

stop loss above the high. If we're looking at people who

who is sold at the swing high will most likely have their

Anyone who is bought at the swing low, they are most likely

framework to read what is happening on the order book via

concepts. Now, liquidity in the market essentially acts as a

how this all fits together within the multi-time frame

story and how well priced it is within the leg. Right so we

essentially using all of these concepts as a mechanical

available order wherever that may be because remember for

you're asking for the for the house you know they're just not

just going to have that in a briefcase in cash right they're

that we can use to help us identify where large pools of

we have looked at how we can use supply and demand zones to

than likely there will be orders that are sitting just

on our price charts well there are three main types of

So prices moved by that imbalance between supply and

go through but in the FX market a liquid market conditions are

market buy order of $700, 000 you would instantly absorb all

the market when we've been looking at those zones on our

your door ready to buy with the exact you know amount that

demand and it keeps moving to seek liquidity to then

pretty much always be enough liquidity on the other side of

all of your demands had been absorbed by the market So price

housing market you know everyone knows property if you

is constantly seeking liquidity to rebalance price. So when we

would continue to shoot up another five price points until

of an order book in the market so each of these lines

to so that's a pretty good example of an a liquid market

very typical example of an a liquid market would be the

liquid there will be bids and offers at every single price

keep it simple for our purposes in the market. So market

if you're just a retail trader and you're not putting through

you know it can take months at a time to make that transaction

not going to be a willing buyer straight away for you to sell

gapping you know either up or down to fill the next best

broker then it's very likely that you have got instantly

demand at those levels may be you know much much lower so a

little warning. I'm sure some of you are just blindly

crack on with it shall we? So liquidity is a concept that can

without you know severely affecting its price. So this

a market. It is the ease to which a market can be traded

liquidity is essentially the amount of demand and supply in

that solid understanding in the core components of the strategy

exactly what I do not want to happen for you. So, this is

to trading in general and I just think you can end up

order in the market to be filled it must be matched with

pretty much where you're going to very often see price

filled because it is an extremely liquid market will

just that much bit and it really brings the strategy up

limiting your speed of progression which is just

markets there may not actually be any bids or offers at

you know billions of dollars at a time however with a liquid

it's the first time learning the style or if you're just new

just you know standing outside your front door knocking on

to another level but it is not necessary to be consistently

liquidity concepts you know it can help us to refine our edge

much success that you can have keeping the strategy as

just get unnecessarily over complicated. So we're going to

on each level so if you have ever clicked you know buy or

sell with an at market order on say Euro dollar via your FX

represents a price level in the market if a market is very

diagram illustrates what liquidity looks like in terms

put your house up for there will not instantly be someone

certain price levels and all the quantity of supply and

and foremost. Now I'm not saying that to try and insult

think they can just cause unnecessary confusion until you

your order to instantly fill your trade you know especially

simplified as possible. So when we're going to start to add

comfortable with those alone. Okay so you know there's your

level but also with a large amount of volume sitting there

ignoring me and that's cool. So I'll shut up now and let's just

haven't spent the time testing those previous concepts on

you've spent a fair amount of time testing and getting

So, you'll probably remember this diagram from the intro to

which is market structure combined with S and D zones and

why, you know, it's just really imperative that you really have

personally know how powerful just using both market

massively advise you to not really watch this section just

market structure on supply and demand zones, then, I would

and highly profitable. Now, it may be a bit overwhelming if

structure and supply and demand concepts together on their own.

your intelligence. It's just more because you know I

You know I know how just how effective that can be and how

have mastered structure and supply and demand zone first

essentially, if you're not super comfortable and if you

the technical analysis lesson at the start of this module and

yet and the reason why is because liquidity concepts, I

you in the next one.