Right, so when we anticipate price to run into an array, it often enough takes our liquidity before tapping into an array.

This will be one of two types of liquidity;

• Buy side liquidity (Above highs)

•  Sell side liquidity (Below lows)

Simple, right?

Let me show you.

You see how with each reaction, price runs buyside liquidity first.


What do you think these reactions are again?


That's right expansions.

Take a look, all of those are expansions, which make everything in between... retracements.

Can you guess which ones would be considered reversals then?

As mentioned before, don’t stress too much with the labeling. Again, that square and rectangle analogy. Every consecutive expansion after your first marked one is a reversal if it breaks significant lows.

Is it clear yet? Those are the lows that broke and grabbed liquidity, in this case buyside liquidity.

Let me answer some questions you might have;

Why are point 1 and 2 not considered to be the significant lows to determine that the expansions are reversals?

Simply because there is no weight behind that move, purpose, more on that later ;)

But mainly It can be for one of the following reasons;

-  Did not [break previous structure]

-  Did not leave behind a [single print engulfing candle]

-  Did not leave behind a [distribution wick]

The main reason being it not breaking previous structure.

In the thick arrow you see the move it actually did.

The line marked with ------?, is the high it was supposed to break to make it a valid low, which in turn would have made it a strong rollover ;)

You see how it's clicking. If that WAS the case we clearly would not be favoring shorts in this bearish run. It's bearish for those reasons. Because the structure is moving as it is.

We don’t predict how it moves; we just react to what it gives us.