Extreme vs Liquidity POI
Not all supply and demand zones are worth trading. Extreme POIs give you the best price at the base of a structural range. Liquidity POIs absorb orders as they form, creating higher-volume entry points. The highest-probability setups occur when both criteria align on a single zone.
Extreme POI
The extreme POI sits at the base of a structural range — the lowest price to buy (demand) or highest price to sell (supply). It offers the best risk-to-reward ratio within the current structure.
Liquidity POI
A liquidity POI sweeps structural liquidity as it forms — stop losses below a swing low or above a swing high. The absorbed orders add volume, creating a stronger zone to trade from.
When Both Align: The Strongest Setup
A zone can be both an extreme POI and a liquidity POI simultaneously. When the base of a structural range also sweeps liquidity during formation, you get the optimal price AND additional absorbed orders.
Bullish Example
Price drops to the extreme of a bullish range, sweeping a previous swing low in the process. The demand zone at this level has both: best price + absorbed stop losses.
Bearish Example
Price rallies to the extreme of a bearish range, sweeping a previous swing high. The supply zone carries both: best sell price + absorbed buy stops.
Side-by-Side Comparison
| Feature | Extreme POI | Liquidity POI |
|---|---|---|
| Location | Base of structural range | Where liquidity was swept |
| Strength source | Optimal price position | Absorbed order volume |
| Risk-to-reward | Maximum (edge of range) | Depends on sweep location |
| Volume profile | Standard zone volume | Higher (sweep adds orders) |
| Identification | Map the structural range | Check if previous levels were swept |
| Can overlap? | Yes — a zone at the range extreme that sweeps liquidity is both | |
| Best for | Optimal entries in ranging structures | High-volume reversals after sweeps |
Adding More Confluences
Extreme and Liquidity are just two of four POI selection criteria. The full framework includes:
Supply/Demand Chain
Zone forms after interacting with a previous same-type zone. Orders stack from old zone to new.
Zone Flip
Zone forms from a failed opposite zone. Orders transfer from defeated side to the new zone.
The more criteria a zone meets, the higher its probability. A zone that is extreme, sweeps liquidity, is part of a chain, and forms from a flip represents the highest-confidence setup in POI selection.
Frequently Asked Questions
Can a zone be extreme without sweeping liquidity?
Yes. A zone at the base of a structural range is an extreme POI regardless of whether it swept any previous levels. The extreme classification is about position within the range, not about liquidity absorption.
Is a liquidity POI always at the extreme?
No. Liquidity can be swept at any point within the range. A zone might sweep a previous swing low while still being in the middle of the structural range. However, the strongest setups are those where liquidity is swept at the extreme.
How many confluences do I need for a good trade?
One confluence is the minimum. Two is solid. Three or more represents a high-probability setup. But remember: confluences improve probability, they don't guarantee outcomes. Always combine POI selection with proper market direction analysis and order flow confirmation.