Master the Art of Trading Internal and External Liquidity! 📈📉
Understand how liquidity flows in the market to identify high-probability trading opportunities.
Key Concepts:
Internal Liquidity: Liquidity within a specific price range.
External Liquidity: Liquidity from outside the current price range.
Imbalances: Areas of price congestion where large orders were likely filled.
Sweeps: Rapid price movements that can signal a change in market momentum.
Trading Strategy:
Identify Internal Liquidity: Look for areas of price congestion and consolidation.
Wait for a Break of Structure: Look for a significant price move that breaks through a previous support or resistance level.
Enter the Trade: Place your order near the external liquidity zone, which is often a continuation of the trend.
Set Stop-Loss and Take-Profit: Use technical analysis tools like Fibonacci retracement or price targets to determine appropriate levels.
Remember:
Risk Management: Always use stop-loss orders to protect your capital.
Confirmation: Combine liquidity analysis with other technical analysis tools for increased accuracy.
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