Liquidity Sweep In-Depth Strategy

Summary

This lesson delves into a comprehensive strategy for a liquidity sweep entry model in trading. It explains the difference between a liquidity run and a liquidity sweep, emphasizing their roles in uptrends and downtrends. The instructor advocates for a multi-time frame analysis, focusing on macro liquidity sweeps for broader trends and micro liquidity runs for entry points. The strategy involves identifying swing highs and lows to determine entry and exit points, with examples provided to illustrate the application of this model in real market scenarios.

Takeaways

• 📈 The lesson focuses on a strategy for combining liquidity run and sweep in trading, targeting both macro and micro timeframes.
• 🔍 In an uptrend, a liquidity sweep is a potential trap, whereas a liquidity run is expected, and vice versa in a downtrend.
• 🎯 The entry model combines macro liquidity sweep with micro liquidity run for optimal trading opportunities.
• 🕒 Multi-time frame analysis is crucial, with the macro focusing on the overall trend and the micro on detailed price action.
• 📉 For a bullish trend on the macro level, look for a swing high to break and form a liquidity sweep; for a bearish trend, look for a swing low.
• 🔧 Time frames should be dynamic, adapting to changes in average daily range (ADR) and price action structure.
• 📊 The strategy involves waiting for a liquidity sweep in the macro trend and a liquidity run in the micro trend for confirmation.
• 📋 The video emphasizes the importance of understanding price action and structure at different time frames for effective trading.
• 💡 The lesson suggests combining lessons on high probability liquidity runs and sweeps for a comprehensive trading approach.
• 🏆 The channel offers a discount for the next 10 users with a specific code as a way to celebrate reaching 100,000 subscribers.

Q & A

What is the main focus of this lesson?

The lesson focuses on a complete strategy for a liquidity sweep entry model in trading, combining both liquidity run and liquidity sweep concepts.

What is the difference between a liquidity run and a liquidity sweep?

A liquidity run is when the market is in an uptrend and targets a swing high, while a liquidity sweep is when the market is in an uptrend and targets a swing low, essentially acting as a trap.

Why is multi-time frame analysis important in this strategy?

Multi-time frame analysis is crucial for understanding the macro and micro trends, which helps in identifying the liquidity sweep on the macro level and the liquidity run on the micro level.

How does the speaker suggest determining the appropriate time frame for trading?

The speaker suggests going lower in time frames until clear structure is seen, adapting to price action, and being dynamic rather than sticking to a single time frame.

What is a stop hunt in the context of this lesson?

A stop hunt refers to a situation where the market is expected to continue in the bullish direction, looking for a stop hunt to continue to the upside.

Why is it important to wait for a close below a certain level before entering a trade?

Waiting for a close below a certain level confirms the formation of a liquidity sweep, which is a signal for a potential entry point in the strategy.

What does the speaker mean by 'trading the liquidity run on the lower time frame'?

It means focusing on the micro time frame where the trader looks for a liquidity run as an entry signal, while the macro time frame provides the overall trend context.

How does the speaker define a demand zone in this lesson?

A demand zone is defined by the speaker as the area between the swing high and swing low of a price range, where price is expected to find support or rejection.

What is the significance of a price rejection from a demand zone?

A price rejection from a demand zone indicates a potential reversal point, which can be used as a signal for a liquidity run entry in the trade.

How does the speaker suggest combining the lessons on liquidity runs and sweeps?

The speaker suggests combining the lessons by looking for a liquidity sweep on the macro level and a liquidity run on the micro level to maximize the probability of a successful trade.

Outlines

00:00

📈 Understanding Liquidity Sweep and Run in Trading

This paragraph introduces a comprehensive strategy for a liquidity sweep entry model in trading. The concept of liquidity run and sweep is explained in the context of uptrends and downtrends. The narrator emphasizes the importance of multi-time frame analysis, explaining the difference between macro and micro timeframes and how they relate to swing highs and lows. The entry model combines both liquidity run and sweep, focusing on macro liquidity sweep for broader trends and micro liquidity run for entry confirmation. The paragraph concludes with a call to action for viewers to engage with the video and a mention of unmonetized content for uninterrupted learning.

05:01

🔍 Navigating Timeframes for Liquidity Sweep Entry Model

The second paragraph delves into the practical application of the liquidity sweep entry model by discussing how to identify the appropriate timeframes for analysis. It suggests starting with a higher timeframe and progressively moving to lower ones until a clear structure is visible. The paragraph illustrates the process with an example, showing how to identify a liquidity sweep on a daily timeframe and then finding a suitable lower timeframe, such as a 4-hour or 6-hour chart, to look for a liquidity run. The narrator also discusses the concept of dynamic timeframes, adapting to changes in market conditions rather than sticking to a fixed timeframe. The paragraph ends with a promotion for the channel's milestone and an offer for the audience.

10:01

📉 Combining Macro and Micro Analysis for Trade Entries

Paragraph three continues the discussion on how to combine macro and micro timeframes for trading entries. It explains that in a bullish macro trend, traders should look for a liquidity sweep to the downside to continue the uptrend. For the micro timeframe, the focus shifts to identifying a liquidity run. The paragraph provides a detailed example of how to analyze price action on a 4-hour chart and a 30-minute chart to find potential entry points. It also touches on the trade-offs between higher probability trades with larger stop losses and lower probability trades with better stop-loss positions. The narrator encourages viewers to combine lessons on high probability liquidity sweeps and runs for a comprehensive strategy.

15:02

💹 Executing Liquidity Run Trades with Precise Entries

The final paragraph demonstrates how to execute trades based on liquidity runs, using the identified macro and micro timeframes. It shows how to wait for a liquidity sweep in the macro trend and then look for a bullish trend in the micro trend to anticipate a liquidity run. The paragraph provides an example of how to set stop losses and take profit levels based on the structure of the price action. It also discusses variations of liquidity runs and how to adapt to different market scenarios. The video concludes with a call to action for viewers to like, share, and subscribe, and a promise of a giveaway if the video reaches a certain number of likes.

Keywords

💡Liquidity Sweep

A liquidity sweep refers to a trading strategy where a trader anticipates a significant price movement that 'sweeps' through a range, often after a period of consolidation. In the video, the concept is integral to the trading model being discussed, where the presenter explains how to identify and capitalize on these sweeps within an uptrend. The video mentions targeting a 'macro liquidity sweep' for the larger trend and a 'micro liquidity sweep' for confirmation, indicating a multi-layered approach to trading.

💡Liquidity Run

A liquidity run is a term used to describe a rapid price movement in a particular direction, often following a breakout. The video script discusses how a liquidity run is expected after a liquidity sweep, particularly in an uptrend, as it signifies the continuation of the trend. The presenter combines the concepts of liquidity run and sweep to form a comprehensive trading strategy.

💡Swing High/Low

Swing high and swing low are technical analysis terms that refer to the highest and lowest points in a price chart over a specific period. In the context of the video, the presenter uses these terms to identify key levels in the price action that can act as potential entry or exit points for trades. The script explains how to target a swing high in an uptrend for a liquidity sweep and a swing low for a liquidity run.

💡Multi-Time Frame Analysis

Multi-time frame analysis is a method of analyzing financial markets by looking at multiple time frames simultaneously to gain a more comprehensive view of the market's structure. The video emphasizes the importance of understanding this concept for effective trading. The presenter briefly mentions having lessons on this topic, indicating its significance in the overall trading strategy.

💡Macro and Micro

In the video, 'macro' and 'micro' are used to differentiate between higher and lower time frames in trading. The 'macro' refers to a broader view of the market, such as daily or weekly charts, while 'micro' refers to a more detailed view, such as hourly or minute charts. The presenter uses these terms to explain how to identify liquidity sweeps and runs on different time frames to make informed trading decisions.

💡Stop Hunt

A stop hunt in trading is a strategy where a price is pushed to a level where many stop-loss orders are placed, causing a rapid price movement once these orders are triggered. The video script mentions looking for a stop hunt as part of the liquidity sweep strategy, suggesting that the presenter is looking for situations where the market might trigger a significant number of stop losses, leading to a favorable liquidity run.

💡Price Action

Price action is the movement of an asset's price over time, reflecting supply and demand dynamics. It is a core concept in technical analysis and trading. In the video, the presenter discusses focusing on current price action to identify potential liquidity sweeps and runs, emphasizing the importance of adapting to the market's recent behavior rather than relying solely on historical trends.

💡Demand Zone

A demand zone in trading is an area on a price chart where buying interest is expected to be strong, often leading to price support. In the video, the presenter identifies a demand zone based on previous swing highs and lows, suggesting that if the price rejects from this zone, it could indicate a potential entry point for a liquidity run trade.

💡High Probability Trades

High probability trades are those setups that have a higher likelihood of resulting in a profitable outcome based on certain criteria, such as strong price action or specific patterns. The video script mentions combining lessons on high probability liquidity runs and sweeps to improve the chances of successful trades, indicating the presenter's focus on optimizing trade setups for better outcomes.

💡Time Frame Selection

Time frame selection is the process of choosing the appropriate time frame for analysis or trading. The video emphasizes the importance of dynamic time frame selection, suggesting that traders should adapt their time frames based on the average daily range and the developing structure in the price action. The presenter advises going lower in time frames until clear structure is visible, which is crucial for identifying liquidity sweeps and runs.

Highlights

Discussing a complete strategy for a liquidity sweep entry model in trading.

Differentiating between liquidity run and liquidity sweep in uptrend and downtrend scenarios.

Combining liquidity run and sweep for an effective entry model in trading.

Importance of multi-time frame analysis in trading strategies.

Macro and micro time frame analysis for identifying liquidity sweep and run.

Adapting to dynamic time frames based on average daily range changes.

Identifying the right time frame for trading by observing price action structure.

Focusing on current price action rather than seasonal trends for day-to-day trading.

Using color coding to highlight significant price breaks in trading analysis.

Providing a discount code for subscribers as a thank you gesture.

Looking for a stop hunt as a signal for a liquidity sweep in a bullish trend.

Waiting for a bullish structure to confirm a liquidity run after a sweep.

Combining lessons on high probability liquidity sweeps and runs for an entry strategy.

The concept of trading liquidity runs on a lower time frame with a macro liquidity sweep.

Balancing between high probability trades and stop loss management.

Using the structure of price action to anticipate liquidity runs and sweeps.

Setting stop loss and take profit levels based on micro and macro price action.

Anticipating liquidity runs after observing price rejection from demand zones.

Strategies for entering trades during liquidity sweeps and runs on different time frames.

Giving away a free bundle course to random viewers if the video gets enough likes.

Transcripts

so in this lesson we're going to talk

about a complete strategy for your

liquidity sweep entry model so basic

knowledge just how I've been explaining

for the past few weeks this would be

your liquidity run why is it your

liquidity run because it's a uptrend and

you are targeting a swing high so you're

expecting a liquidity run now if it's a

uptrend and you're targeting your swing

low this would be a liquidity sweep

which is basically a

trap so what we're going to do in this

lesson we're going to combine both yes

our entry model is going to consist of

both your liquidity run and your

liquidity sweep in the great scheme of

things we're targeting our macro

liquidity sweep but for our micro and

our confirmation we're going to Target

our liquidity run and let me explain

this so before we get into our entry

model we need to understand the

multi-time frame analysis and I have two

complete lessons on this topic so we're

going to go over this real quick so on

the macro which is your higher time

frame let's say you have a

wing and this would be your

macro on the macro you have a swing High

swing low and price broke

structure but on the micro what you

would have here is you would have

multiple

swings forming your swing High

and this would be your micro so this is

something you need to understand which

is completely simple before you proceed

please make sure you like the video and

leave a comment this video is completely

unmonetized to make sure you guys are

not interrupted by ads so for this entry

model on the macro what we'll be looking

for is strictly this if you're in the

uptrend you're looking at a swing high

for price to break that swing high and

come back inside of the range forming

your liquidity sweep and vice versa if

it was inverted if it was a bearish

trend you would be looking at your swing

low so here you have your liquidity run

and your liquidity sweep so how are we

going to combine these two for our

perfect liquidity sweep entry model so

what we're going to do is on the macro

we're going to focus on our

sweep so this would be our

macro our macro

swing we're going to focus on our

liquidity

sweep and on our micro which is our

lower time frame we're going to focus on

our liquidity run so we're going to

focus on this

so again on our micro on our lower time

frames we are focusing on our liquidity

run on our macro our higher time frames

we're focusing on our liquidity

sweep so let's take a look at this

example so right now we are on a daily

time frame and what do we have here we

have a major break of structure so we

have a major break of structure on The

Daily time frame so now we are looking

for our macro but we're looking for our

macro where we're looking for our macro

right here what is going on Within These

daily candles this is what we're looking

for right now so let's find our our

macro and how are we going to do this

because a lot of people ask the question

time frame time frame what time frame

think about it like this if the addr

changes again if the ADR which is your

average daily range changes from a

season to a season or a year to a year

why would the time frame be stationary

why would the time frame stay the same

so it's impossible for me to say okay

this is NSD USD and you should take

trades based on this time frame why

because the ADR changes so you need to

adapt you need to be dynamic you need to

look at Price action and judge it based

off what you see so my theory here is

when looking for your macro you want to

go lower and lower and lower until you

start seeing structure within this area

so what we're mainly focusing on here is

current price we're not paying attention

to what happened here we're not looking

at on a daily time frame where the macro

trend is because we're not trading on

the the seasonal Trends we're not

trading based on thre month span or four

month span this is not what we're

trading on we we are trading on a

day-to-day basis so we're focusing on

our current price action which is this

right here and what happened recently we

had a break of structure so this is what

we're what we're focused on right now

and so what you do is now you go lower

and lower but this is why I have the 12h

hour The 8 Hour the 6 hour the 4 Hour 1

hour 30 and so on why because I like

going lower and lower until I start

seeing structure develop so right now as

you can see here I don't see any

structure

so let's keep going

lower I'm starting to see a swing go

lower starting to see a better swing so

we'll probably stick between the 4 hour

and a 6h hour so what do we have here we

have a swing

high and we have a swing low so again

like we looked at previously we had a

major breakup structure which is this

breakup structure right here let's

colorcoded

purple just for the ability to stand out

I want to thank everybody for helping

this channel get to 100,000 subscribers

and as a way to give back the next 10

users to use code etm Army on our

website will'll get 50% off everything

on the website so we have this major

break of structure on The Daily time

frame so we are

bullish we are bullish here so what are

we looking for when it comes to our

liquidity

sweep now let's remove this what are we

looking for when it comes to our

liquidity sweep entry we are looking for

a stop hunt we're looking for a stop

hunt right here to continue to the

upside why the upside because the

overall trend is bullish so now what do

you do you want to go lower and you want

to see structure within these couple

candles so it's going to 1 hour and now

what are you starting to see you're

starting to see a little bit of

structure starting to see swing High

swing low swing High swing low swing

High swing low swing High swing low but

this is more for a season Trader again

if you're a beginner you want to go as

low as you can until you can see clear

price action something like this so now

this is our micro so so our macro here

is our 4H hour why is it our 4our

because we' seen our swing high and

swing low and on the micro this is our

structure uh this is our time frame why

because we can see clear structure on

the 30 minutes so in this specific case

with this specific price action our time

frame is 30 minutes and our 4 hour and

this is how you reach the conclusion of

time frames and if you want to expand on

this more make sure you check our

website when I did a whole lesson I

think I got two lessons on time frames

so let's wait for our liquidity sweep

again this is our liquidity right

here and you're starting to see

structure to the bearish side so our

micro is

bearish price is

consolidating and here you have your

liquidity sweep so what are we waiting

for we're waiting for bullish

structure we're waiting for bullish

structure but what you can see here is

price did not close below so what let's

wait for a close if a close does

occur okay so now we have a close below

so what are we waiting for now we are

waiting for bullish structure to give us

that liquidity run and my pre lesson

which was last week it was high

probability liquidity runs and what you

want to do now you want to combine my

lesson on high probability liquidity

sweeps and my lesson on high probability

liquidity runs and combine both of them

to get this entry so make sure you check

this lesson after you check after you

finish after you complete this

lesson so let's wait for bullet

structure we do have a little bit of

bullet structure here but this is not

convincing let's get back inside of the

range

so what do we have

here we have price rejecting from a

demand zone right

here price rejecting from this demand

zone why is this our demand Zone because

this is our swing high and this is our

swing low and this is the bottom of that

range just how I explained

previously just how I explained

previously in my uh liquidity run lesson

so if price does reject and does not

break this low right here and does find

rejection within this demand area we're

looking for a break Above This level and

we're trading this liquidity run so what

we're doing here is we're trading our

liquidity run on the lower time frame

but our macro is our liquidity

sweep if we get a rejection if price

breaks this level then we need to look

for

another another uh entry so it did not

happen so now let's look for another

entry what do we have here we have a

liquidity sweep on the

micro so what you could do now is you

could take an entry right here why

because this is our high probability

uh liquidity run because you have a

sweep right here so you're

expecting a liquidity run right here but

in my opinion in this case this would be

more of a lower probability trade it's

still pretty decent but we want to see

more structure and I'll explain this in

a second so you could take an entry once

price gets below here what gets above

here so you could take this trade right

here and you could already be in the

trade with your stop loss below your

liquidity

sweep so

now the price expanded now you have new

structure so now you have your swing low

right

here and you have your swing low right

here and you have your swing high right

here so if price does reject from this

level right here or goes for a liquidity

sweep right here

and comes back and attacks this level

again you can get in your trade now the

problem here is this is a higher

probability trade but with a larger stop

loss so looking for high probability you

give up a lot of your stop-

loss and why is this a higher

probability than here because structure

is already built now we have a micro

bullish Trend as you can see here we

have a micro bullish Trend so the fact

that you have a micro bullish Trend now

this is now a higher probability when

compared to here all you had was one

confirmation which was your liquidity

sweep right

here and

a you had a liquidity sweep here and you

had a run over your uh swing high so

this is why this was a lower probability

trade but your stop loss was in a better

place your stop loss was right

here so this is what I mean by by

looking for the highest probability

you're sacrificing your stop- loss and

vice

versa so let's see

and here you got your TP so the basis of

the strategy is if you are in a bullish

macro Trend what you're waiting for

obviously is your liquidity sweep to the

downside to continue the trend bullish

but when it comes to our entry on the

lower time frames which is your micro we

are looking for a liquidity run so on

the macro we're looking for a liquidity

sweep but on the micro we're looking for

a liquidity run and in in in the most

simplest way before you go too deep in

this strategy what you you would want

your liquidity sweep to happen and then

you would want to see a bullish Trend

you would want to see a swing being

broken once that swing is broken price

comes back inside of the range if price

finds rejection inside of this range

which is your micro swing low and micro

swing High you would expect price to go

for a liquidity run right here and

Contin continue bullish so this would be

the basic way so now let's take it a

step further so let's take a look at

this example so the way we reach this

conclusion of the 6- hour time frame is

the same thing we did in previous

examples so there's no point of going

over that again and this is our swing

high and this is our lowest point so

this would be our swing low and what are

we waiting for we are waiting for price

to get closer to that level so we can

get a liquidity sweep which would be

liquidity sweep to the bottom side and

continue up why because as you can see

look at the structure of the current

time frame high low high low high low so

we're we're waiting for either a

continuation or if price does struggle

here or a stop hunt to continue to the

upside so now we can see clear structure

on the 1 hour let's see how price

behaves when it gets closer to our

liquidity sweep area

so this is our macro liquidity sweep so

what are we waiting for now we are

waiting for that uptrend structure on

the

micro let's get back in the

range and we are back in the range so we

have a swing low here and a swing High

here which would determine our micro

range

so what are we waiting for we are

waiting for price to come back into this

level react from this level or maybe

even stop hunt and then go for a swing

High liquidity

run now price is at this level so now

the price is at this level if price does

get to this level right here we can

expect a liquidity run to the upside

and price quickly broke through before I

could even adjust my stop loss in my TP

but you can have your stop loss right

here this would be a little bit of risky

just in case price comes back for a

micro liquidity swing and you can have a

conservative stop loss right

here and your TP would be your first

rejection point which would be right

here

which would be our premium right here so

price is already at our first CP and

your second DP could be this level right

here breaking completely outside of the

range on the

macro and that's if you want to wait

this long for this trade to play out

obviously the first TP is a lot easier

and you would be in and out the trade so

here's another variation of your

liquidity run as you can see it's a

bullish Trend and what do you have here

you're targeting That Swing high so once

price approaches that level and runs

your liquidity but quickly comes back in

range for a liquidity sweep what are you

waiting for it is a bullish Trend so now

you're targeting that new swing high and

once you're targeting that new swing

high once price gets above that level

you can anticipate your liquidity run

and why is that because of your previous

liquidity

sweep so let's take a look at this

example as you can see on the macro you

have your liquidity sweep so now let's

go on the lower time frame so what do

you have here you

have an inducement phase right here

which would be your swing on the micro

got taken out so this is your double

liquidity sweep so this is a liquidity

sweep on the micro and the macro so what

happens here just how I explained

previously you will Target this high and

once price is above this high you can

get in an entry right here

now you're in the

trade hope you guys enjoyed this lesson

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