Liquidity Void Report

Introduction

Over my past three years of trading I’ve yet to find a concept as reliable
and consistent as ‘liquidity voids’. The concept is simple but your ability to
apply and profit from it will correlate directly to your ability to practice and
experience the different variations of each liquidity void.

Liquidity voids are not the holy grail of trading but it’s the closest thing to it
(that I’ve found). After two years of practicing, identifying and trading these
liquidity voids I can say with confidence that these voids can and will make
you an incredible amount of money. It will not come right away, you won’t
be able to read this report and instantly make money off them but you will
be able to start understanding and identifying these voids in a real time
environment.

If you haven’t set up some type of journal to log your observations I’d
strongly advise to do so before reading further. This will be key to the
identification of liquidity voids. I’d also appreciate it if you would keep what
you learn in this report on the down low, share bits and pieces but don’t
give away the whole pie … this report is the whole pie.
Liquidity Void

Definition:

A liquidity void is an impulsive move away from a level that creates 1-3 big
bodied candles whose bodies have yet to be filled in by other candles. This
is considered inefficient price action, price must fill in these bodies before
resuming in the direction of the big bodied candles.

Example on XBTUSD 4-hour chart:

Liquidity Void

Example #2:

Example #3:
Liquidity Void
Takeaways:

There are a few aspects to a liquidity void and its fill that we need to pay
attention to.

1. Creation of the void

○ The aggressive expansion that creates the void should come
from an area of consolidation.
○ Void creations are versatile but ideally, the void gets created in
1-3 big bodied H4 candles.
○ The void should be above / below an area of accumulation or
consolidation. That allows the void fill to tap into that
accumulation while filling the void.
2. Liquidity generation within the void
○ Notice how price prints clean H4 highs within the void that
DON’T completely fill the void.
○ Identification of these swing points within the void is the key to
forming setups.
○ Either trade towards the void & liquidity or patiently wait for an
AGGRESSIVE raid of the swing points into the liquidity void.
We will talk more about this later.
3. The fill of the void
○ The price swing that fills the void serves two purposes. The
first is obviously, filling the void and tapping into the area of
accumulation that the void came from. The second is executing
the stop orders resting above / below our swing points that
price generated earlier (refer to above examples)
○ The move that fills the void should be incredibly impulsive, it
should create a void of its own within filling, allowing price to
return in the direction of the void.
 ○ Entering upon an aggressive void fill will take a lot of practice,
you must train your mind to enter against strong moves as long
as they are filling a larger void.

4. Where we consider a void ‘filled’

○ This is the most difficult to put into words due to the different
candle structure on lower time frames.
○ It is my experience that the 4-Hour chart works best for
identifying fill points, we will have an in depth section discussing
this but for now, find the most recent opposite colored candle
leading the creation of the void.
○ Daily candles are efficient as well, if you are seeing one on a
lower time frame print your fill point higher / lower than you
would on a HTF chart.
Types of Liquidity Voids

Trend reversal liquidity voids:

These liquidity voids change the direction of an intermediate to long term

trend. There will be an extended amount of price action above / below
these types of voids. The market will wait to fill this void until all
intermediate term liquidity voids on the opposite side are filled. The
constant creation and fills of voids opposite of this original void will create
an intermediate term trend, once the master void at the bottom / top of the
range is filled price will expand incredibly aggressively reversing the
intermediate term trend.

Trend continuation liquidity voids:

These voids are generally printed on the lower time frames (m15-h1).
There will usually be a larger liquidity void in the direction of the trend that
price is attracted to on the higher time frames. The hook and ladder will be
especially useful when identifying these types of liquidity voids. You will
usually see a scam wick fill these types of voids.

Fake out / neutralization void:

These voids often neutralize liquidity above highs or below lows before
reversing. They trick traders into thinking price is expanding towards new
lows/highs when in reality price is neutralizing liquidity above/below swing
points. We look for these voids to be ignored after manipulating our
designated level(s). These types of voids will often mix and match with the
other types.
Types of Liquidity Voids
Trend Reversal Liquidity Void:
Types of Liquidity Voids
Trend Continuation:
Types of Liquidity Voids

Fake Out Void:

Void Fills

Forecasting:

There will be an experience factor when identifying / predicting void fills,

there is no way around this. However, there is a systematic approach to
predicting when price will fill a void.

First, we must review the two different types of void fills; wicked fills and
body fills.

Wicked Fills: The liquidity void is filled by an aggressive wick before

reversing.

Body Fills: The liquidity void is filled by a candle body before reversing.

Once a liquidity void is formed, allow price to pause and consolidate, this
consolidation will generate liquidity. The opportunity comes once the
liquidity is manipulated, this is where you enter your position.

Void creation → liquidity generation → manipulation → void fill → reversal

The idea is to catch the reversal after the void is efficiently filled. So, when
is a void filled? This will be easier explained with chart examples.

Remember, void fills should be aggressive. If you see a fill that lacks
aggression be very hesitant on forming a reversal setup. Again, it will not
be easy entering against an aggressive move but it will come as your
identification skill increases.
Void Fills

An effective liquidity void will always have liquidity generated above / below
its fill point. It is important to always make sure there is some form of
consolidation or liquidity generation by your designated void. If there is no
liquidity within the void then it will lose its significance and won’t be filled.

As you start to see a void form pause and let a structure form within the
void. This structure should generate our needed liquidity and tighten the
void, this tightened / shrunk void is what I call the ‘sweet spot’. The sweet
spot will provide excellent entries and invalidation levels allowing a much
more beneficial R:R.

It is also important to take the time frame into consideration. As the

timeframes change, so do the price structures and liquidity voids. I like to
use the 4-Hour chart as my “go to” time frame for voids. There will be
different strategies we implement with the changing timeframes, we will talk
more about this later.

Not every void will be filled. Use what we’ve talked about earlier in this
report to identify high probability liquidity voids and add the MLR strategy
as extra confluence. The best way
Let’s look at some examples:

Do NOT try and force liquidity voids, look for high quality voids with liquidity
generated within them and stay PATIENT.
Void Fills
Trading Strategies
Now for the interesting part, how do we translate this information into a
profitable trading strategy? I have three different strategies I implement
depending on the market environment. I have a LTF scalping strategy, a
HTF swing strategy and a ‘trading into the void’ strategy. I will give you a
brief overview of each of these strategies then provide you with examples
as I believe that is the best way to program them into your brain.

The Scalping Strategy:

This strategy is incredibly versatile and works well in just about any market
environment. I typically implement it when we are chopping on the higher
time frames. With this strategy we must stay disciplined and be in and out
of the market as quickly as possible due to the fact that it is a scalping
strategy.

I use the m5-m15 timeframes for this strategy, we are basically doing
everything I’ve shown you just on a much lower timeframe with lower
intervals and much more pressure which is why it is important to be in and
out as quickly as possible. Lower time frames will provide more liquidity
voids making it a bit more difficult to identify the correct void to use, pay
attention to the examples we go over and re-read the report if needed.

Rules:
● Give yourself a weekly trade limit with this strategy
● Trade in the direction of the trend
● Liquidity must be generated
● Manipulation into a void (doesn’t necessarily have to fill the
void)
● Manipulation must be aggressive
● Only trade during London or NY session (unless trading BTC)
Trading Strategies
The Swing Strategy:

This strategy is correlated with just about everything we’ve talked about
previously in this report. It is my go to strategy, I generally use the hourly,
four hour and daily charts when using this strat. This one is for the traders
that can’t always be in front of their charts, these setups will take longer to
play out but they are much more reliable and beneficial. We can use this
strategy when looking for a trend reversal or HTF continuation pattern.

Rules:
● Limit your trades
● Liquidity generated
● Manipulation into a void (higher probability if filled)
● Manipulation must be aggressive

Trading into the void:

This is a more advanced strategy, I wouldn’t recommend trying this until

you have more experience with these voids. However, it is still something
we will go over so you have it in the future.

With this strategy I trade towards the fill of the void rather than the opposite
side of the void fill (you can do both). There are certain times when it is
appropriate to anticipate a void fill and make money off of it rather than
waiting, wasting a quality setup.
Rules:
● Limit your trades
● Trade towards the generated liquidity
● Must be a 1-2 H4 candle void (higher probability)
● Trade only during London or NY session (Forex)
Scalping Strategy

This was a short I took on June 14th with an entry at $9399.

Some things I wanted to point out:

● Trading in the direction of the trend

● Buy side liquidity generation in the form of a hook
● Aggressive manipulation
● Manipulated level retest, chance for re-entry
● Quick feedback from the market.

With this strategy you MUST be patient and allow setups like this one to
form. Even if it only happens 2-3x a week these setups will yield massive
profits. It’s easy to get carried away using this strategy which is why I only
use it when I have to … Discipline is a must.
Swing Strategy
Swing Strategy

This is a EURUSD trade I took a while back. Notice how the original entry
stems from the liquidity void just above the hook. Once price manipulated
that hook with aggression and neutralized the liquidity above I pulled the
trigger.

Now, look at the exits. I admit, I exited this one a tad bit early but
regardless the exit stemmed from the liquidity void we were about to fill. I
exited out of fear of reversal because I knew that we could fill that liquidity
void and reverse at any time which would eat up my profits.
Trading into the void
Trading into the void

This is a somewhat recent trade I took on USDCAD. Notice how I had the
area of open liquidity already marked out, you must find an area of clean
liquidity to trade towards if you’re wanting to use this strategy effectively.
After you’ve found an area of liquidity, try and find a clean liquidity void.
Use the fill of the liquidity void as your TP point.

Again, this is not a strategy I advise you to utilize until you fully understand
the concept of liquidity voids. This strategy can be utilized on any time
frame, just make sure your risk is managed.

Conclusion
Liquidity voids are incredibly powerful tools when utilized correctly. They
can help you:

● Determine order flow

● Find reversal points
● Find continuation points
● Provide invalidation levels
● Determine market structure

With this information comes an incredible amount of responsibility. Be

disciplined, don’t expect to find setups every single day because it takes
time for these types of setups to manifest.

Study and reflect. Take what you learned here and apply it to the market,
allow your brain to digest this incredible concept and watch your trading
change.