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When people talk about “liquidity” on a chart they usually mean places where many resting orders are likely to sit: stop-losses above obvious highs and below obvious lows, or pending entries around those same levels. This introduction explains the idea in plain language and shows how it connects to the strategy modules documented on this site.
Where liquidity tends to rest
- Above equal highs and prominent swing highs (buy-side liquidity).
- Below equal lows and prominent swing lows (sell-side liquidity).
- Around the highs and lows of the previous session.
A liquidity level is a place where price may react. It is an observation, not a prediction.
Taken, not “guaranteed”
Price sometimes trades through a level and reverses; sometimes it keeps going. Studying many examples — including the failures — is the only honest way to learn which conditions seem to matter. That is why my journal records every setup I study, win or lose.
From concept to checklist
In the Two-Stage Liquidity Reversal I document a checklist that begins with exactly this question: where is the liquidity, and has it been taken? You can read the criteria on the strategy page and see how I applied them in journal entries.
Educational only. Trading involves substantial risk and past results do not guarantee future results.
Conclusion
Liquidity is a useful lens for reading price, not a promise about what price will do next.