Summary
Highlights
Previous Day High (PDH) and Previous Day Low (PDL) represent significant liquidity pools, defining the range for the current day's trading. These act as external liquidity points and can be areas of strong reaction or expansion. Marking these out daily helps determine the daily bias.
Low Resistance Liquidity (LRL), also known as trendline liquidity or failure swings, occurs when price repeatedly bounces off a trendline without taking out previous swing highs or lows. This generates accumulated stop losses (sell-side or buy-side liquidity) that the market often aggressively sweeps, leading to fast price movements.
Equal highs (EQH) and equal lows (EQL) are price points where multiple highs or lows are printed at the exact same level. These are significant liquidity pools that smart money traders target, as retail traders often place stop losses at these 'resistance' or 'support' levels. Pay attention to EQH/EQL on NQ specifically, as they are more prominent due to higher volatility compared to ES.
Data wicks are created during high-impact news events, forming extremely volatile candles with distinct data highs and data lows. These act as prominent liquidity pools and imbalances that price often seeks to re-test or sweep. Traders should mark these levels and anticipate price movements between them after news releases.
Unfilled Fair Value Gaps (FVG) are internal range liquidity (IRL) points where the market has an imbalance. The market typically moves from internal range liquidity (like FVGs) to external range liquidity (like major swing highs/lows). Prices will often trade into these gaps to fill orders before continuing to external liquidity targets.
A Devil's Mark refers to a wickless candle, indicating an imbalance in price where a traditional wick (either open high or open low) is not printed. These are more significant on higher timeframes (e.g., hourly, 4-hour) and suggest that price may return to that level to correct the imbalance and print the missing wick.
The video emphasizes the importance of combining all these liquidity concepts to build a strong trading bias. By identifying multiple confluences (e.g., sweeping London lows, presence of LRL, unfilled gaps, and equal highs), traders can identify high-probability long or short opportunities with conviction.
Traders are encouraged to practice identifying all these liquidity types on charts, review their reactions, and rewatch the video. Consistent practice will lead to a deeper understanding of price action and enhance the ability to develop effective trading strategies and identify the next draw on liquidity.
Session liquidity refers to the highs and lows of different trading sessions (e.g., Asian, London, New York). Price frequently reacts strongly to these levels, often sweeping a previous session's high or low before moving towards the opposite extreme of another session. Understanding these is crucial for daily bias.
This session builds upon the foundational understanding of buy-side and sell-side liquidity, introducing more advanced concepts like session, internal, and external liquidity. The goal is to teach viewers how to identify different types of liquidity for higher probability trades.