SMART MONEY CONCEPTS #1: LIQUIDITY THEORY
Hi everyone! As you all should know by now, I mainly use smart-money concepts to enter into my trades. Today I will be talking about the concept of liquidity and how to capitalise on it.
Looking at the graph, there are 4 main types of liquidity that I use and as stated in the chart, I will normally look for entries off the liquidity grab zones or liquidity hotspots as I would describe.
Make sure to backtest and forward test into your chart data to identify which type of liquidity are the most prevalent. There are many many different forms to liquidity zones and knowing when a liquidity grab occur can be a very profitable strategy.
Looking at the graph, there are 4 main types of liquidity that I use and as stated in the chart, I will normally look for entries off the liquidity grab zones or liquidity hotspots as I would describe.
Make sure to backtest and forward test into your chart data to identify which type of liquidity are the most prevalent. There are many many different forms to liquidity zones and knowing when a liquidity grab occur can be a very profitable strategy.
Looking at the GOLD chart here, I have identified the multiple liquidity zones and grabs that have occured, which gave a sizeable risk-reward in terms of entering at these zones.