Liquidity & Stop Hunts
Understand where stop losses cluster and how institutions hunt them. Turn their game into your edge.
What is Liquidity?
The fuel that moves markets
Liquidity = resting orders in the market (stop losses & pending orders)
Where do traders place stops? Above swing highs for shorts, below swing lows for longs
This placement is predictable - if you can see it, institutions can too
Smart money NEEDS this liquidity to fill their massive orders
What is liquidity in trading?
Keyboard Navigation
Use ← → arrow keys or spacebar to navigate through the slides.
Key Insight
Every swing high and swing low is a liquidity target. Think like institutions - where are the stops?
Test Your Knowledge
After learning: Take the Liquidity Quiz in the Training Hub to test your understanding.
Reinforce Your Learning
Additional materials to help you master Liquidity Concepts
Liquidity Concepts Examples
Real market examples with analysis
BTC Equal Highs Sweep
BSL Sweep into Reversal
Setup
- 1Three equal highs at $43,200 (obvious BSL)
- 2Price sweeps above, triggering buy stops
- 3Immediate rejection with long upper wick
- 4Entry on LTF CHoCH below sweep
Key Lessons
- •Equal levels = liquidity magnets
- •Wait for the sweep, don't anticipate
- •Rejection wick = sweep complete
Deep Dive Articles
Inducement vs Liquidity: Why Proximity to the Zone Matters
6 min read
Liquidity Sweeps: Structural vs Reactionary — How to Avoid Getting Trapped
7 min read
Internal vs External Range Liquidity: Where the Market Gets Its Fuel
8 min read
Early Enticement: Why the Market Builds Traps Before the Real Move
9 min read