Liquidity Inducement Entries (LIQUIDITY BLOCKS)

What's going on, guys? Welcome back to a brand new interquity trading video. Today is going to be a video that's been long awaited. Everyone is commenting it. This video will be on liquidity blocks, the way we enter the market, the levels that provide us our stop-loss placements. I'm going to simplify it as much as possible so you guys understand everything about our entries. Okay. So, first we're going to use a diagram to make sure you guys understand what is a liquidity block, the logic behind it, and how we use it. Of course, first we will use a diagram for a bullish example. So, let's just say the market is trending to the upside, moving higher, taking out previous highs. Okay? And then all of a sudden, we print a low again. We go higher, printing new highs, and then we get a sell-off. and we get this occurring. Center this up in the screen. Let's talk about this. You can see how we were swiftly moving out to the upside, printing new highs in the market, pullback, new high, and then finally selloff, grabbing a low here, inducing sellers. Why does this induce sellers? They are going to view this to be a BOS. This level is going to be a trap for them. So, we'll make it that a red box. You guys should know that by now. And then we stab out the liquidity. Boom. That is where the liquidity block is now created. Now we can use this level as a future entry or what you can do is use the lower time frames and find an entry in this high. That is all a liquidity block is in a bearish example here. Okay? Because again we swept the highs and moved down. So it's a bearish liquidity block of course. And that's all it is. Nothing too complicated. So I don't want you guys to over complicate things. Keep it as simple as possible. But again, lows taken out. Boom. We sweep out the liquidity and we leave this high. Now, since we have swept out previous liquidity, now we view this high right here to hold no liquidity, meaning we don't have a reason to run above it. So, that's the logic behind it to help you understand this as much as possible. All I have to do for a bullish one is invert this. And there you are. So, same thing. We are selling off to the downside. Here's a high, low, high, low. Market runs bullish. We take out a high and boom, sell off to the downside and we run a level of liquidity. Now, remember, since we have run this previous low, aka level of liquidity. Now, this low that we just marked on, we view to have no liquidity. So, that is now going to be used as a liquidity block. Again, you have the option of using whatever this whole area in the future as an entry or in the lower time frames, you would open up price action and dissect what's going on in this low on the lower time frame. So, let's just say this is a M15 or H1 time frame. You could go into the like the M1 in here, right? And try and find yourself some sort of entry back up to the upside. However you want to look for your entry, but that's just a good example of refinement in here. or you use this whole area in the future as an entry. Okay? And again, this is a bullish one. What we previously went over would be that bearish one. Okay. So, now we understand what is a liquidity block. Let's go into the charts and I'm going to show you guys over and over and over to train those eyes to find it in live time. Of course, we have a 15-minute chart and I don't want to talk about direction. I don't want to talk about none of that. I don't want to talk about um the bias running liquidity here. No, none of that. This is purely going to be on liquidity block. Something I want to say before we continue with this video is understand that liquidity blocks is not the end all be all. Liquidity will always be priority period. If you don't understand liquidity, please go back and watch other videos. You need to understand that first and then you pair it with liquidity blocks. From a priority perspective, you have liquidity being up here and then liquidity blocks being number two. I I guess you could say. But we aren't just taking entries off liquidity blocks. We need to understand liquidity first. If you don't, you're all you're going to be doing is plotting on highs and lows that have been taken out, taking entries left, right, and center, and you are going to accumulate a lot of unnecessary losses. Okay? So, that's kind of like your disclaimer. I'll say before we continue on with this video, if we're going to identify liquidity blocks, number one, I can point out right here, just following on from left side of the screen to right side of the screen, price is sold off, taking this internal low, printing what could be a liquidity block for us. Of course, you need to pair it with liquidity. And again, that's not the purpose of this video, but check this out. If I grab this whole low, this blue circle, drag this blue box over. Look how we tap right into that liquidity block and move away. Now, is it did this whole sequence, did this whole move just occur because the LB, because the liquidity block? No, you need to pair it with liquidity. All the liquidity block does for you essentially is provide you a level to place your stop loss. What do I mean by that? Let's just say you took this entry. Your stop loss would go at the low of the liquidity block. You see what I mean? It provides us a level to put our stop loss. Aka no liquidity block, no stop-loss. So, we need an LB to take an entry, of course. So, there would be a bullish example for you. Of course, on the flip side, as simple as this, you have a level of liquidity taken out here. So, this whole area can be used as an LB. You have to also understand that not every LB we're going to be taking entries off of. So, this is why I'm marking this one on. Yes, we reacted off it. However, just because it's an LB does not mean we're going to enter off it. But, it's important to identify them because look, you can anticipate this false reaction here, this pullback. And of course, if there's a bullish opportunity, you buy back up. It's important to identify, yes, this is an LB, but no, it's not an LB we would take an entry off of. So, there's a big difference there. And that's the lesson in that one. You can see here another one. It happens over and over and over. We have a love liquidity taken out and we tap into it and there's a reaction and that alone is so so powerful. Yes, it's important to note that we're not taking entry off every liquidity block, but it is important to have the understanding of the liquidity block as a whole. Now, if we continue on with price action, let's see if we can find any others for you. We end up tapping into this one on the left hand side and then we run bullish all the way back up. You can argue and say this isn't the cleanest one, but again, it makes sense. If I grab that last high before the LB, you can see how we tap into it. Reaction. Not an area we would be entering off of, but yes, it's an area that can provide a reaction. Then what happens afterwards? Check this out. We can see how price has swept out a level of liquidity. All we can do, we can just do this all in the 15-minut time frame to make this very easy. And here you have an area that we would use as an entry. But again, a liquidity block. This would act as that level where we would place our stop loss. Just like this. So entry, stop loss goes below. Now, I see a lot of people don't make this mistake. I see a lot of people getting greedy or just placing it in random levels. No, you want to keep it as repeatable and systematic as possible. Use the low as the level to place your stop loss. So, we tap that LB. There's your entry and you're targeting whatever it is to the upside. That would be a bullish example. So, all these bearish ones, you see how they're still by the book liquidity blocks, but no, they're not liquidity blocks that we would use for entry. Again, it's still important to identify what is one and what isn't one. Another one right here. You can say you have highs taken out, taps into the liquidity block, and there's a reaction, right? Yes, it didn't sell all the way to the downside, but understand this. It still provided us a reaction in the market, and that alone is so important. Now, if I just zoom out, you see how easy this can be, and I don't want you guys to overcomplicate this. Understand that if you don't have liquidity down, if you haven't watched our previous videos and you don't understand liquidity yet, please don't prioritize the liquidity block. You need to understand liquidity first and then you move into the liquidity blocks for your entries, of course. All right, guys. I hope you enjoyed today's video on the infamous liquidity blocks. It is not too complicated. It's quite simple to be fair. But again, it's important to understand that you need to build the story first in your trade, aka the bias, the direction which comes from liquidity, and then we will use the liquidity blocks for our entries. If you guys did enjoy today's video, please leave a like, a comment down below, turn those notifications on. We'll see you in future videos. Take care.