Liquidity II - EUR | USD Case Study

Let’s take a walk in the park, shall we?

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Theory


What can we notice here, just based oÉ of this price chart?

We have clear bullish order flow. Price is respecting the bullish PDA's nicely.

See how price slows down. Expansions are not as aggressive as before, and how price just pulls back immediately after every buyside sweep.

Now we dial in, and wait for? A market shift.

Now we can identify the potential dealing range.

Here we can see the first potential draw on liquidity.

Because under it lies a displacement and lots of weak lows hanging around not taking out any buyside, resulting in a weak rollover.

Once we understand our DOL, we can look at what arrays we have in our vicinity.

We notice a shift zone and a displacement.

Remember, this is the daily timeframe, we are currently creating bias for the upcoming trading week, days.

Price prints a bullish candle, leaving behind a clear bait and liquidity target to run into.

Bearish momentum then kicks in as we sweep previously daily high from that bullish candle. Ideally, we would wait for the higher retracement into a deeper array for a pullback, but however, when price does expand lower rapidly like this, we adapt. We don’t jump in, no, but we go back to the drawing board.


Getting in sync with price, going full Flowmo. In scenarios like this you would most likely wait for the lower TF's to align and be in sync with the HTF bias, which was bearish. So, every HPT would be to the downside.


This concludes that our focus in this scenario would be bearish till our first target, this is going to be our STAGE, we'll begin using that term from now on.


Target is downside until it is reached or until we have clear signs that the market structure changes/shifts. See how price continues to the downside, creates to bearish days until our first DOL has been met. In these two days we would then be looking for lower timeframe patterns to look for shorts until that lower target.

Now this is where the liquidity range comes into account, we would always have the levels marked out for partials what not.


On the other hand, after that target that has been met, we are given a nice orderblock, which injected volume within that move to bring it further down.


Remember, after a clear run on liquidity, we often enough expect a retracement to happen. But as this is daily time frame, and we haven't tapped into a strong discount PDA our focus would be on lower TF for some small scalps.


Narrative and stage is still bearish. All our eyes are now on the newly formed OB and MT from that OB.

Narrative and stage is still bearish. All our eyes are now on the newly formed OB and MT from that OB.

Now we simplify our charts, make sure that we don’t have unnecessary overlapping targets. Current local low becomes the main draw on liquidity.

Below we see we have a displacement and an OB to run liquidity to.

Notice how we expanded towards the discount areas? This is how we align our higher timeframes with our ETFs. We tapped into the daily arrays; our stage has become clear. The main focus clearly goes into finding the setups that then align with the higher timeframe DOL.

So now that we have entered bullish PDA's like in this case, we would have to shift our over aggressivebearish bias, look to lock in profits quickly and just step on the sidelines.

Next stage goes into this. Looking at the bearish PDA's as our targets

And the cycle is nearly complete;

Price continues to rally lower, and we can run easy premium to discount shorts after the small bullish candle retracement. From there we saw the opportunity for quick scalps into the HTF displacement, and then shifting our bias back down.

Project & Resources

Project & Resources

Project & Resources