Educational Series - Smart Money Concepts ( Liquidity )Hi there guys!
I will be doing a short tutorial on Smart Money Concept's liquidity.
What is it?
- Liquidity acts as a driver to move the market in a specific price range.
- We can find liquidity in areas where many people place stop losses and buy/sell stops.
- Market makers will manipulate the price in order to break through these obvious zones and seize the liquidity.
How to look for them
- You will be looking for areas where price are of relative equal highs/lows.
- Areas where price has not gone to swept the "stop losses"
Why is it useful?
- Helps to forecast where price might potentially head to
- Potential areas for take profits upon clearing of liquidity
- Avoid placing your stop loss at liquidity areas
It takes some time to learn how to spot liquidity.
If you do enjoy this tutorial, feel free to follow me and boost this post! :)
Regards,
Chen Yongjin
Smartmoneyconcepts
GBJPY Blending Smart Money Concepts with Long Money ConceptsSmart Money Concepts since its inception with ICT have polarized the trading community mostly in a positive way, and I think said concepts are more handy for traders who have experienced many cycles in the market and are looking to refine their edge
with the advancing technology and the transaction basis of today's exchanges based on a liquidity perspective.
ICT has pioneered a new way of understanding liquidity especially on the granular side of trading, but most traders, including myself, that don't have the edge which is tenure and experience, these concepts are too simple for a complex sport, and the play book of course
is tailored to the team's strength and weaknesses.
One thing I have noticed in the trading community is that since there is no barrier to entry, like any entry level job, without the experience you cannot expect to make much off trading in the beginning phases as a trader. You have to study theory, history, psychology, and just the environment around the ticker
and tape to really grasp the notion of the science. Yes, trading is a zero sum game, but let us not get lost in that saying because mostly everything in life is zero sum. Ying and Yang.
As of recently I stopped annotating things like break of structures to define trends, chochs, and unnecessary order blocks. Think about it. What really is a break of structure?
What is really a change of character?
Liquidity Sweep?
Imbalance?
Think about it all these terms coincide with events that in reality define a certain market personality. To my perspective, none of these terms actually exist on the chart.
If you go by the assumption that pricing has already accounted for the events in the then to now, then in reality, there is no real imbalance, liquidity sweep are just market fluctuations, and a choch is literally price curb tailing itself in the other direction, simply put.
But then you have to ask yourself the famous SMC question.
Where am I in structure?
That's where the SMC free trial ends, and the error begins, now you have to buy the course from your mentor.
One thing I'm learning is that in today's timeline, instant gratification is the reason why most traders give up.
This takes time. Trading isn't a game like they say. It's not a job either. It's an understanding.
It's a language.
SMC is very powerful yes, especially for intraday traders, but for me, it's not enough to draw an actual framework that can be fractalized, besides the order blocks, which are subjective.
The market moves with intentions, and regulated prices stop on the weekend, because guess what, it's the weekend and the market makers, liquidity providers, and large speculators have lives too.
But that doesn't the intentions aren't still there.
Frequency, tonality, personality, and modes are codified in the market just as any word coming out of your mouth. It's a language. And no fluent speaker learned to speak what they speak overnight.
It takes time. Fall in love with learning this new language.
How to use the monthly openHere's a quick video on how to use the monthly open as a simple analysis for your trading. This technique helps us FOLLOW and not PREDICT the market.
Volume profile confirmationsWatch this clip to learn how the volume profile can be used as an extra confirmation when looking for optimal entry criteria.
Entry Model | Supply and Demand, and Smart Money ConceptFirst look for the higher timeframe trend is the price making higher highs and higher lows? (For bullish market) or lower highs and lower lows? (For bearish market) bullish or bearish, then go to the lower timeframe and see if the lower timeframe trend matches the higher timeframe trend. After that mark your supply and demand zones, and point of interest(POI). If you guys like this post please hit like👍 and follow. Thanks.
Example TLL/ discount entry - Smart Money Concepts*This Content is for Education Purpose only*
In this example, we will show an example on how to combine discount pricing, TLL and demand zones to find high probability entries. First, we will locate the range we are currently trading in. Our target will be the next high that we expect to be taken out. In this case will it be the Swing High. The protected low we expect to hold, since the name already says it - it is protected by the Market Makers. When we see Trend Line Liquidity (TLL) forming before our POI, we can ensure that the Market Maker is building up Liquidity to fuel up their position. This will increase the probability of your POI/ demand zone.
Confluences:
Trend: Bullish (pro trend)
Liquidity forming before POI (TLL)
Premium/ discount pricing: Discount
LIQUIDITY MODELS🔹 Liquidity is like fuel to move the market in a specific price zone.
🔹 We can find liquidity in zones where a lot of people set their stop losses and buy/sell stops.
🔹 The market makers will manipulate the price to break these obvious zones and take the liquidity.
🔹 These are the most common liquidity patterns.
GBPUSD Using the Element of TimeThe element of time is a technical analysis tool that I've previously elaborated on -> Check links to related ideas.
The illustration is pretty self-explanatory.
First attempt failed, however price presented a better opportunity a couple hours later which ultimately yielded all our profits for the week.
I will provide my thought process, execution and exits for this trade in a subsequent recording :)
Stay tuned !
Why price reacts to s&d zones before breaking themWhy price reacts to s&d zones before breaking them.
We tend to see a reaction for one simple reason;
- BFI's need liquidity to accumulate a sizable position.
So, how would a reaction provide them with this liquidity?
- Retail traders will enter aggressively at these s&d zones
expecting price to move away from them. Now, BFI's will
use all this liquidity to accumulate a sizable position,
targeting the next pool of liquidity which is
retail's stop-losses on the opposite side of the zone.
WHY DO WHAT THE 90% ARE DOING WHEN YOU SHOULD DO THE OPPOSITEI saw an enormous liquidity pool being created by price on GBPUSD. All i was anticipating was for price to come attack that area which i call the HOTSPOT. The market is seeking for liquidity time after time,so have it in mind that price is built to attack all strategies. Liquidity is the only reason price moves,this is why even after all the confluence and confirmations you get according to your strategy you still find yourself loosing,that is because you got caught up at the HOTSPOT. All strategies work but if you can understand where price wants to attack you can become exceedingly consistent in this market. Bear in mind that price do not care about your strategy,all price cares about is your money
Framing high probability setups using orderblocksEveryone is trading orderblocks these days.. so how do you use orderblocks to frame a high probability setup for yourself?
In this video I will show you exactly what criteria I look for when framing a high probability setup.
When I want to trade right off of an orderblock, there are a few things that I look for.
1. A Swing high or low
2. Imbalance above or below the swing point
3. An orderblock just past the imbalance
These 3 confluences together increase the profitability and probability of my trades and will help you increase your profitability as well.
Best of luck!
Dilpreet
Smart Money CONCEPTS - Can you relate?Here is an overview of (to me) why support and resistance don't work (at a successful enough rate).
If you feel like this is the case be honest with yourself. And maybe try something new. please remember the 90 90 90 rule!!!
90% of traders
Lose 90% of their account
In the first 90days
Have a little think as to why?
For the majority of newbie traders that enter the market.. the first thing they are taught to understand?
Support and Resistance, Trendlines, Fibonacci (does work if used correctly)
So just be mindful of what the banks are doing and understand from their perspective that if they know the MAJORITY trade Support and Resistance... Don't you think they know where the majority of the people stop losses are going to be? ...
Any questions feel free to ask






















