LESSON 3
ALL YOU NEED TO KNOW ABOUT LIQUIDITY
CORRECTION ON THE LAST CLASS
• What is Liquidity in Forex?
• Liquidity refers to how easily you can buy or sell a currency without
causing a significant price change.
• In highly liquid markets, there are lots of buyers and sellers, so you
can enter or exit trades quickly.
• Example: Major currency pairs are very liquid because they are traded
heavily.
EXAMPLES OF LIQUID PAIRS
• According to crazilo we don’t want to be trading pairs with average volume below 100k. We are the illegal market makers
• 1. XAU/USD (Gold vs USD)
• Why it's liquid: Gold is a major store of value and is traded globally against the US dollar.
• Liquidity Insights: XAU/USD can be volatile but remains highly liquid due to global demand for gold.
• 2. USD/JPY (US Dollar vs Japanese Yen)
• Why it's liquid: USD and JPY are among the most traded currencies, making this pair highly liquid.
• Liquidity Insights: Ideal for low spreads and smooth trading, especially during overlapping trading sessions (US & Asian marke
• 3. EUR/JPY (Euro vs Japanese Yen)
• Why it's liquid: Combines two major currencies from different regions (Europe and Japan), making it a popular cross-pair.
• Liquidity Insights: Higher liquidity during the European and Asian trading sessions.
• 4. GBP/JPY (British Pound vs Japanese Yen)
• Why it's liquid: Known for its volatility and large price swings, this pair has deep liquidity.
• Liquidity Insights: Highly active during the London session and the Asian session.
• 5. GBP/USD (British Pound vs US Dollar)
• Why it's liquid: One of the most traded major pairs, providing constant liquidity.
• Liquidity Insights: Known as "Cable," it offers good opportunities due to its trading volume.
CONTINUATION
• 6. GBP/CAD (British Pound vs Canadian Dollar)
• Why it's liquid: Combines two major economies, UK and Canada, though it is more volatile than
GBP/USD.
• Liquidity Insights: Strong liquidity during the UK and North American trading sessions.
• 7. EUR/CAD (Euro vs Canadian Dollar)
• Why it's liquid: Not as liquid as EUR/USD or USD/JPY but still offers good opportunities due to cross-
border trading.
• Liquidity Insights: Active during European and North American sessions.
• 8. EUR/USD (Euro vs US Dollar)
• Why it's liquid: The most traded currency pair in the world, providing unmatched liquidity.
• Liquidity Insights: Narrow spreads and high liquidity, especially during the European and US sessions.
• 9. USD/CHF (US Dollar vs Swiss Franc)
• Why it's liquid: Considered a safe-haven pair, this one is highly liquid in times of economic
uncertainty.
• Liquidity Insights: Frequently traded during European and US trading sessions
SECRET SAUCE
• Do you know this are the only pairs I fuck with
• Whyyyy? This is because data doesn’t lie, lets quickly hop into trading
view
Summary: my trade only pairs
• [Link]/USD
• [Link]/JPY
• [Link]/JPY
• [Link]/JPY
• [Link]/USD
• [Link]/CAD
• [Link]/CAD
• [Link]/USD
• [Link]/CHF
What is a Liquidity Pool in Forex?
• A liquidity pool is a concentrated area on a price chart where there
are a lot of orders waiting to be executed. These orders can be buy or
sell stop orders, placed by traders to either enter or exit the market.
• Why is it Important?
• Liquidity pools are attractive to large institutional traders (banks,
hedge funds) because they provide an opportunity to enter or exit
large positions without moving the market significantly.
What is a Stop Run?
• A Stop Run occurs when large market players, like banks or hedge funds,
intentionally move the price to trigger stop-loss orders.
• Stop-loss orders are placed by traders to limit their losses. When the price hits these
orders, it triggers a sell-off (or buyback), which pushes the price further in the same
direction.
• Why do Stop Runs happen?
• Big players use stop runs to take advantage of small traders’ positions, moving the
market in their favor before reversing it.
• Example of a Stop Run:
• Price moves down, hitting a lot of stop losses (set by retail traders), causing a sharp
downward spike. After hitting these stop-losses, the market often reverses and goes
back up.
RELATIONSHIP BETWEEN STOP RUN
AND LIQUIDITY POOL
• Liquidity Pools
• A liquidity pool is an area on the chart where many orders (such as stop-losses or pending
orders) are clustered. These pools form near key levels like support, resistance, equal
highs, and equal lows.
• Traders: Many retail traders place their stop-losses around these levels, assuming that the
price will respect the support or resistance, thus creating a concentrated zone of liquidity.
• Stop Runs
• A stop run happens when large market participants (e.g., institutions, hedge funds)
intentionally push the price to trigger the stop-loss orders sitting within a liquidity pool.
• These big players target liquidity pools to exploit the accumulation of orders. By doing
this, they generate momentum in the market, creating volatility that they can profit from.
WHERE ARE THE LIQUIDITY POOLS
• 1 Previous Day’s High/Low
• 2. Basic Low/High of the Previous Session
• 3. Equal High/Equal Low (Double Tops/Bottoms)
• 4. Previous Session’s Final High or Low
• 5. CME Open in Forex (3:30 AM / 8:30 AM) + 15-Min Swing Highs and
Lows
Where do Liquidity Pools Form?
Listen attentively, make money make money
• 1. Previous Day’s High/Low
• Why it's a Liquidity Pool: Many traders use the previous day’s high and
previous day’s low as significant levels. Retail traders often place stop-
loss orders just beyond these levels, expecting the market to respect
these zones.
• Breakout Traders: Traders looking for breakouts place buy stops above
the previous high and sell stops below the previous low, hoping for
strong momentum when the price breaks these levels.
• Big Players' Tactic: Large institutions target these areas to trigger retail
traders’ stop orders (creating a stop run) before moving the market in
the opposite direction, collecting liquidity.
Further explantion on previous day high/low
• 2. Basic Low/High of the Previous Session
• Why it's a Liquidity Pool: The previous session’s high and low act
similarly to the previous day’s levels. Traders place their stop-losses or
entry orders just beyond these points.
• Uninformed Traders: Some traders believe the market will either reverse
or break out when these levels are reached, so they place orders just
beyond them, providing liquidity for larger players.
• Big Players' Tactic: Large market participants may push the price beyond
these levels to trigger stop orders and create liquidity before reversing the
price direction.
[Link] High/Equal Low (Double Tops/Bottoms)
• Why it's a Liquidity Pool: Equal highs and equal lows are often referred to as
double tops or double bottoms in technical analysis. These levels are seen as
strong zones of resistance (equal highs) or support (equal lows). Many traders
place their stop-losses just above or below these levels, expecting them to hold.
• Breakout Traders: Some traders expect a price continuation and place buy
orders above equal highs (assuming a breakout of resistance) and sell orders
below equal lows (assuming a breakout of support).
• Resistance Viewpoint: Other traders interpret equal highs as strong resistance,
expecting the price to bounce back down from these levels. Similarly, equal lows
are seen as strong support, where they expect the price to bounce upward.
• Big Players' Tactic: Large institutions know that retail traders see equal highs as
resistance and equal lows as support. These big players manipulate the market
by pushing the price through these areas, triggering stop-losses and capturing
liquidity before possibly reversing the price direction, trapping uninformed
traders.
ACCORDING TO RETAIL
• Support: A level where the price hits and bounces back up, indicating
that buyers are stepping in to prevent the price from falling further.
• Resistance: A level where the price repeatedly hits and then falls
back, showing that sellers are stronger at that point.
Explanation:
support
TRUST ME THIS TYPES OF TRADERS
STOPS ALWAYS GET TRIGGERED
• Don’t believe the bullshits online my friends. Go to youtube after this class
you see lots of bullshit strong resistance, it always works. This is a strong lie.
• The market makers perfectly engineered equal highs and lows. For them to
be cleared in the future
• 2 THING HAPPEN TO EQ H/L
• 1. They are either extinguished immediately by another candle wicking
through them
• 2. they are not extinguished immediately, rather price goes up look for
another liquidity to stop run before finally coming to run stops on the
EQUAL H/L
FURTHER MASTERY OF EQ
HIGH/LOW
• Lets say we see a perfect set up either short( to sell) or longs(to buy)
• Lets assume sell in this case, Price created this set up, but your entry
wasn’t triggered.
• Price then created an equal low, before retracing( coming back up) to
trigger your entry. Simply close the trade
• Why?
• An equal high or low does 2 things like I said before. We are ready to
sell, an equal low was then made. This equal low in case to will first go
and stoprun a point. What is this closes stop run, where we placed
our STOP LOSS
FUNCTION OF EQ LOW/HIGH
• 1. perfectly invalidates a set up when liquidated candlestick member
or liquidating candlesticks equal high or low
• 2. perfectly tells us when to fuck out of a trade. If there is an equal
low or high made before your entry trigger andit has not been
extinguished , bail out. Close that trade
• 3. when we enter a perfect set up(trigger), we can use equal highs or
low to know where we can exit all or some of our positions
4. Previous Session’s Final High or
Low
•Why it's a Liquidity Pool: The final high or low of the previous session can often signal exhaustion of
market momentum. Retail traders place stop-losses beyond these points, assuming these levels are
strong.
•Breakout Traders: They place buy or sell orders in anticipation of a breakout beyond these levels,
expecting a continuation in the price movement.
•Big Players' Tactic: Big players may intentionally push the price to break these levels, triggering stops
before reversing the market, catching retail traders off-guard.
5. CME Open in Forex (3:30 AM /
8:30 AM) + 15-Min Swing Highs and
Lows
• What is CME (Chicago Mercantile Exchange)?
• The Chicago Mercantile Exchange (CME) is one of the largest and most influential
derivatives and futures exchanges in the world. It plays a significant role in global
financial markets, especially in trading various futures contracts, including commodities,
indices, and currencies.
• Why it's important for forex traders:
• Liquidity and Price Action: Although retail traders may trade in the spot forex market,
institutional traders often trade currency futures on the CME. As a result, movements
in CME currency futures can influence price action in the spot forex market.
• Key Times: The CME opens during specific times, and this can lead to increased volatility
in the forex market. For example, the CME opens for forex futures at 3:30 AM and 8:30
AM (EST), which are key times when traders watch for significant moves in the market.
Why CME Affects Forex Traders
• Market Sentiment: The opening of CME sessions (3:30 AM / 8:30 AM)
often brings large players, such as hedge funds and banks, into the
market. This can lead to large price movements in currency pairs and
trigger liquidity pools.
• Stop Hunts and Liquidity: Big players often take advantage of the
liquidity in the forex market around these times. They aim to trigger
stop-losses that retail traders place, creating large price movements
and making the market more volatile.
• THANK YOU FOR LISTENING. CHEERS FUTURE BILLIONAIRES