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table of contents
Introduction
Liquidity
Order Blocks (OB)
Conclusion
03
Introduction
95% of retail traders lose money. Why? Banks and institutions
exploit retail traders who use traditional concepts like support and
resistance, trendlines, and indicators. The real key is understanding
how the banks and market makers are trading, since these are the
institutions which drive the market, not regular traders like you and
I. These institutions are known as ‘smart money’ and they trade on
concepts like Liquidity, Order Blocks, Fair Value Gaps etc. which are
very different to common retail strategies.
This guide will teach you how to trade with the smart money,
explaining the most profitable setups and entries to look for. It is
written in a very clear and easy to understand format with
supporting diagrams and examples.
Some of the concepts taught may seem too good to be true and
almost like a cheat code to trading. Despite these strategies being
profitable, it is important to remember, you cannot win every trade
and you must develop a strategy which you back-test thoroughly.
You cannot catch every move; it is important to wait for the right
trade opportunities and not chase a trade or have FOMO. The market
will always be there for the next trade.
Note:
I suggest using Trading View (free)
to perform your analysis. It has
many annotation tools to help you
analyse all your charts easily.
Liquidity
This is a very important concept to understand when trading with
these ‘smart money’ setups. Liquidity gives us an indication of
where price will run through with strong impulsive candles. It allows
us to anticipate large moves into these areas and set take profit
targets at these levels.
06
What is liquidity?
The strict definition of liquidity is the ability to buy or sell an asset
quickly and easily without affecting its market price.
When there are areas of liquidity, price will move quickly in and out
of these areas to fill their orders meaning price will not stay there
very long. This is represented by large candle wicks and bodies
around these liquidity levels.
Notice how when liquidity gets taken out (when price goes past the
liquidity level), the move has a lot of volume and large candlesticks.
08
Remember: When we look for liquidity, it is always above or below
the candlestick wicks, not the body.
The more equal highs or lows at the same level, the more liquidity
lies just above or below for banks to sweep.
Liquidity Sweep
A liquidity sweep is where banks quickly take out the stop losses set
by retail traders where the liquidity lies, and then they move the
market very impulsively in the opposite direction. We can think of
liquidity sweeps as fuel for the next move. This is seen all over the
markets every day.
09
Order Blocks
Understanding the key price levels at which banks prefer to buy and
sell is crucial for comprehending institutional order flow, and this is
where Order Blocks come into play.
We look for price to re-test the bullish order block and we expect to
face a lot of buying pressure, causing a strong up move, similar to the
one previously. We can set our stop loss at the bottom of the order
block and take profit at liquidity levels. Example:
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The order block has Fair Value Gaps (explained later) directly
either side of it
The order block has not been tested before, so this is the first
time since the initial strong move that price has moved back to
this price area
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Please note: The order block doesn’t need to have all of these
factors, but the more the better.
In-trade management
We usually expect price to react quickly off an order block. Once you
have placed your trade, if price takes a long time to move away from
the order block, it may be worth taking a closer look at the validity of
the order block and potentially closing the trade.
Trading is not for everyone but if you are serious about it, investing in
your learning is the most important step you can take towards
financial freedom and a better quality of life. Trading is not just a
hobby; it's a skill that can change your life. With the right knowledge
and strategy, you can turn your passion for trading into a lucrative
career. The Trade Entries Complete Guide is the easiest way to learn
how to trade with the smart money:
As a way to thank you for your support for Skyline Traders Club we
are offering 10% off the Trade Entries Complete Guide with discount
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