My Secret High Probability Liquidity Sweep Strategy [Full In-Depth Guide]

Summary

In this video, the trader reveals a unique liquidity level that has transformed their trading strategy, focusing on high-probability liquidity sweeps and Turtle setups. The approach emphasizes identifying high and low points within fair value gaps and order blocks to capture precise market movements. Key strategies include analyzing fair value gaps, recognizing high-probability liquidity levels, and using techniques like the three-drive pattern. The video also discusses the importance of understanding liquidity runs and targeting external liquidity for higher reward-to-risk trades. This method is especially effective for funded account trading and achieving consistent profitability.

Takeaways

• 😀 Focus on high-probability liquidity sweeps or Turtle sweeps rather than traditional higher lows and previous session levels.
• 😀 The core strategy revolves around identifying liquidity levels created within a fair value gap or order block for sniper entries.
• 😀 Pay attention to the 50% level of a fair value gap, as it can significantly influence liquidity sweep probabilities.
• 😀 The highest probability liquidity levels are those formed inside unfilled fair value gaps or around inducement areas after breakouts.
• 😀 Look for 'highs' or 'lows' within fair value gaps, not random levels, for more accurate trade entries.
• 😀 A three-drive pattern can indicate a significant liquidity sweep, with the third drive often marking the real move after multiple sweeps.
• 😀 Institutions use these liquidity levels inside fair value gaps to execute large orders with minimal slippage.
• 😀 Avoid trading fully filled fair value gaps, as these are less likely to yield high-probability liquidity sweeps.
• 😀 The strategy emphasizes using order blocks, fair value gaps, and inducements together to find optimal entry points.
• 😀 To pass funded trading accounts, focus on high-reward-to-risk setups, leveraging concepts like external-to-internal liquidity and fair value gaps.

Q & A

What is the main focus of the video?

The video focuses on revealing a high-probability liquidity level that can help traders identify successful liquidity sweeps or Turtle setups. The creator explains how to distinguish between high and low probability liquidity levels and shares insights from years of trading experience.

What is a high-probability liquidity sweep?

A high-probability liquidity sweep is a scenario where price action sweeps through a level of liquidity, typically identified as a high or low within a fair value gap, to trigger an immediate price reaction, leading to a potential trading opportunity.

How does a fair value gap (FVG) influence liquidity sweeps?

Fair value gaps (FVGs) are important for identifying liquidity sweeps. A high or low created within a fair value gap tends to have a higher probability of being swept, as institutions look to target these levels for minimal slippage when buying or selling.

Why are highs or lows within a fair value gap considered high-probability levels?

Highs or lows within a fair value gap are considered high-probability liquidity levels because they often align with institutional interest. These levels act as inducements, where price action can be expected to react and reverse after sweeping the liquidity at those levels.

What role does the order flow or bias play in identifying liquidity sweeps?

Order flow or market bias is crucial in identifying liquidity sweeps. For instance, if the order flow is bearish, a high liquidity level above a fair value gap may be swept as price moves lower. However, the primary focus is on the levels themselves, regardless of bias, though bias can enhance the probability of success.

What is the significance of a 'Turtle Soup' in this context?

A 'Turtle Soup' refers to a trading strategy where price sweeps liquidity at key levels (such as highs or lows within a fair value gap) to trigger a reversal. This technique is popular for identifying sniper entries that have the potential for significant price moves.

What is the three-drive pattern mentioned in the video?

The three-drive pattern refers to a price movement that makes three distinct attempts to reach a liquidity level: the first touch, the second touch, and then the third touch, which often triggers a strong reversal. The third drive is considered the start of a real move.

How can one differentiate between high and low-probability liquidity sweeps?

High-probability liquidity sweeps are often characterized by a liquidity level being created within a fair value gap or order block. A low-probability sweep, on the other hand, may involve a level that is already partially or fully filled within the gap, reducing the likelihood of a strong reaction.

What is the importance of external and internal liquidity levels in this strategy?

External liquidity levels are those that exist outside the current market structure, while internal liquidity levels are those within it. Understanding the relationship between external and internal liquidity helps traders identify optimal entry points for high-reward trades by targeting these levels in sequence.

How can traders use the 'change of character' to time entries?

Traders can use the 'change of character' (a shift in price action or market structure) to time entries. After a liquidity sweep, the change of character can signal the start of a new trend or reversal, which can be used to enter trades with higher probabilities of success.