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What is liquidity
Liquidity refers to how active a market is aka the amount of traders trading a market. The more liquid a
market, the better

The forex market is particularly liquid which means that many people and institutions trade the forex
market when compared to something like the stock market or the crypto market. 6 trillion dollars are
traded everyday within the forex market. A more liquid market is always better because it means that it's
easier to pull money out of the market because there are more buyers and sellers to trade with

Liquidity does fluctuate throughout the day as different traders around the world begin to trade the
markets. The best time to trade the forex markets is during the London session. This starts at 8PM GMT
and ends at around 5PM GMT. This is the best time to trade because it's the most liquid session in the
market and therefore the time where it is most easy to make money.

Liquidity when referring to SMC trading

Despite the very liquid nature of the forex market, often large institutions open huge positions since they
have access to huge capital. In Situations such as these, Smart money aka the institutions with access to
huge capital find retail liquidity in the market or artificially add retail liquidity to the market when there is
not much retail liquidity. The way they do this is by printing situations onto the market that would
instigate either retail selling or buying. They would then use the retail selling to fund their own buy
positions or vice versa.

This process happens often in the market and is called stophunting - Check this out for more info on
Stop hunting - https://www.investopedia.com/terms/s/stophunting.asp

Here is an example of this happening on a real life chart - https://www.tradingview.com/x/1eqP4vVO/

Where Liquidity lies in a market
Liquidity lies in any area where retail traders are likely to enter positions. This is mainly at areas of
Support and resistance and trendlines, because retail traders are likely to enter positions here, Smart
money is likely to take that liquidity to then fund their own desired moves in the market. BELOW IS AN
EXAMPLE OF A CHART WHERE THERE WAS RETAIL LIQUIDITY THAT WAS THEN TAKEN BY SMART
MONEY

https://www.tradingview.com/x/2nL9li9p/ - AREA OF RESISTANCE

https://www.tradingview.com/x/zCW8CHdc/ - TRENDLINE LIQUIDATION

How I used this to help me in the NZDCAD setup

Right at the bottom of the market on NZDCAD I noticed that the market has just liquidated a nice area of
EQL or support. This meant that SMT had all the liquidity to open buy positions since they had instigated
retail selling - https://www.tradingview.com/x/MMGwllPC/

I had also then noticed that the market had formed a perfect area of EQL right at the bottom of the
market. I knew that there would be a lot of retail liquidity resting at the EQL, I then used that knowledge
to add confluence to my sells that would targeting the area of support. -
https://www.tradingview.com/x/uHcXGjwW/
I then started to looking for other concepts to actually find an entry to take me to the area of EQL which
is when I noticed a nice area of HTF 4H supply - https://www.tradingview.com/x/RKjvXRR7/

However, I understood that if I were to enter straight from the HTF on this trade, I would have to deal with
massive SLs. Therefore I went to refine my entry to the LTF. As the market came into the HTF area of
supply I noticed that the market was forming a perfect area of distribution. I then marked out a nice area
of supply on the LTF that I could then enter from as a LPSY entry

https://www.tradingview.com/x/hYbXHvRB/ -
 I then was patient and waited and here are the results of all the above analysis -
https://www.tradingview.com/x/0Wkqdvqd/

I hope you learnt something from the video and this document. This full document
was fully typed out by myself and these video do take a lot of time and effort so if you
haven’t liked the video or subsribed please make sure to do that it would really help
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