Core Concepts
Liquidity POI
A supply or demand zone that sweeps structural liquidity as it forms, adding absorbed orders
A liquidity POI is a zone that sweeps structural liquidity (or any form of liquidity) during its formation. When a demand zone forms while price dips below a previous swing low, it triggers the stop losses below that low. These triggered orders add volume to the zone, making it a higher-volume area to trade from. The same applies to supply zones that form while sweeping above previous swing highs. Liquidity POIs are stronger than standard zones because they carry additional orders absorbed during the sweep.
✓How to Recognize
- •A previous swing low or high exists near where the zone forms
- •Price breaks through that level as part of zone formation
- •Volume spike occurs at the sweep level
- •The zone then reverses — the sweep was fuel, not a break
⚡How to Avoid
- →Treating every wick as a liquidity sweep (need structural significance)
- →Entering during the sweep before the zone forms
- →Ignoring that non-sweep zones can still be valid (just weaker)
- →Not distinguishing between a sweep and a genuine break of structure