Liquidity I - Cheap vs Expensive
Liquidity will be the thin threaded silver-lining which will hold everything intact as we dive into all the concepts throughout EXODUS. That’s why we begin with it so early on, as your expert intuition will be honed throughout this process.
Theory
So, let's take it a step back, we ask ourselves those three questions mentioned above. Where did price come from? This is always based on the previous Swing which creates the range. More on that later.
So...
Where did price come from. The second question is the easiest to answer, where is price now?
Where price is at currently. Lastly, we ask the final question, where could price go to It’s not rocket science, obviously it could go up or down. But we try to find points where price is MOST likely to go to before a reaction.
Where could price go to? -> Either the liquidity above or below.
Those two points are simply draws of liquidity. We don't anticipate taking direct entries on these points, but we simply use them to build the narrative. The first piece of the puzzle for us to help create a clear story of probabilities.
This implies and concludes that liquidity will be above old highs and lows, as those are in external areas of the current price range. Which will most likely give a reaction, and fuel the move anticipated on higher timeframes.