Liquidity I - Pullback Scenarios

Often enough we also see price run on liquidity before retracing. This comes in handy when we know what the higher timeframe order flow is, we can then wait for the retracements and ride the direction towards the HTF draw on liquidity.

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Theory

Now we must focus on two potential scenarios when price is pulling back.

  • Price will run liquidity, it will break previous market structure, and then it will pullback.

  • Price will run a strong expansion, and it will not run any liquidity, it will then commence to form significant market structure.

Price will travel from that low resistance to the higher resistance area which would potentially be a displacement (More on that later).