MMT ESSENTIALS : LIQUIDITY SWEEPS
Trading Turtle Soups๐ข
A Thread๐งต
Trading Turtle Soups๐ข
A Thread๐งต
When you or I press the โBUYโ button in any financial market, there will always be a willing โ SELLERโ to match our order. However, that is not the case for larger entities.
Huge players canโt just โBUYโ and โSELLโ as they need opposite orders on the other end to match their order.
That is why liquidity sweeps or turtle soups occur in the market.
Huge players canโt just โBUYโ and โSELLโ as they need opposite orders on the other end to match their order.
That is why liquidity sweeps or turtle soups occur in the market.
Liquidity sweep happens when price trades above/below a swing high/low and aggressively displaces in the opposite direction.
In this example, we can see that the swing low was taken first. At this moment, trend trades tend to place sell orders with their stop loss near the recent swing high.
These stop-loss orders are โBUYโ orders to protect the short positions of trend traders.
๐๐ก๐๐ฌ๐ ๐จ๐ซ๐๐๐ซ๐ฌ ๐ฌ๐๐ซ๐ฏ๐ ๐๐ฌ ๐ฅ๐ข๐ช๐ฎ๐ข๐๐ข๐ญ๐ฒ ๐ญ๐จ ๐ฆ๐๐ญ๐๐ก ๐ญ๐ก๐ โ๐๐๐๐โ ๐จ๐ซ๐๐๐ซ๐ฌ ๐ฐ๐ก๐ข๐๐ก ๐ข๐ฌ ๐ญ๐ก๐ โ๐ญ๐๐ค๐ ๐ฉ๐ซ๐จ๐๐ข๐ญโ ๐๐จ๐ซ ๐ฅ๐๐ซ๐ ๐ ๐๐ง๐ญ๐ข๐ญ๐ข๐๐ฌ.
In this example, we can see that the swing low was taken first. At this moment, trend trades tend to place sell orders with their stop loss near the recent swing high.
These stop-loss orders are โBUYโ orders to protect the short positions of trend traders.
๐๐ก๐๐ฌ๐ ๐จ๐ซ๐๐๐ซ๐ฌ ๐ฌ๐๐ซ๐ฏ๐ ๐๐ฌ ๐ฅ๐ข๐ช๐ฎ๐ข๐๐ข๐ญ๐ฒ ๐ญ๐จ ๐ฆ๐๐ญ๐๐ก ๐ญ๐ก๐ โ๐๐๐๐โ ๐จ๐ซ๐๐๐ซ๐ฌ ๐ฐ๐ก๐ข๐๐ก ๐ข๐ฌ ๐ญ๐ก๐ โ๐ญ๐๐ค๐ ๐ฉ๐ซ๐จ๐๐ข๐ญโ ๐๐จ๐ซ ๐ฅ๐๐ซ๐ ๐ ๐๐ง๐ญ๐ข๐ญ๐ข๐๐ฌ.
Liquidity sweeps happen regularly but only two kinds of liquidity sweeps are ideal to trade from. They are:
. ๐๐ซ๐๐๐ซ ๐ ๐ฅ๐จ๐ฐ ๐๐ข๐ช๐ฎ๐ข๐๐ข๐ญ๐ฒ ๐๐ฐ๐๐๐ฉ
. ๐๐๐ง๐๐ฅ๐ ๐๐๐ข๐๐ง๐๐ ๐๐ข๐ช๐ฎ๐ข๐๐ข๐ญ๐ฒ ๐๐ฐ๐๐๐ฉ
An order flow liquidity sweep can be seen as a candle science liquidity sweep in the higher timeframe.
The Hourly sweep(order flow liquidity sweep) in this example can be seen as a previous candle sweep(candle science liquidity sweep) in the daily timeframe.
. ๐๐ซ๐๐๐ซ ๐ ๐ฅ๐จ๐ฐ ๐๐ข๐ช๐ฎ๐ข๐๐ข๐ญ๐ฒ ๐๐ฐ๐๐๐ฉ
. ๐๐๐ง๐๐ฅ๐ ๐๐๐ข๐๐ง๐๐ ๐๐ข๐ช๐ฎ๐ข๐๐ข๐ญ๐ฒ ๐๐ฐ๐๐๐ฉ
An order flow liquidity sweep can be seen as a candle science liquidity sweep in the higher timeframe.
The Hourly sweep(order flow liquidity sweep) in this example can be seen as a previous candle sweep(candle science liquidity sweep) in the daily timeframe.
๐๐๐๐๐ ๐น๐๐๐ค ๐ฟ๐๐๐ข๐๐๐๐ก๐ฆ ๐๐ค๐๐๐
We have seen that there are FLOD (Fair Value Gap), OD (Fair Value Area), and LLOD (Swing High) in an order flow leg. The last line of defence (LLOD) is the swing high.
๐๐ ๐จ๐ง๐ฅ๐ฒ ๐๐ฑ๐ฉ๐๐๐ญ ๐ญ๐ก๐ ๐๐๐๐(๐ฌ๐ฐ๐ข๐ง๐ ๐ฅ๐จ๐ฐ) ๐ญ๐จ ๐ก๐จ๐ฅ๐ ๐๐ง๐ ๐ ๐ฅ๐ข๐ช๐ฎ๐ข๐๐ข๐ญ๐ฒ ๐ฌ๐ฐ๐๐๐ฉ ๐ญ๐จ ๐ก๐๐ฉ๐ฉ๐๐ง ๐จ๐ง๐ฅ๐ฒ ๐ฐ๐ก๐๐ง ๐ญ๐ก๐๐ซ๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐๐ ๐ข๐ง ๐ญ๐ก๐ ๐จ๐ซ๐๐๐ซ ๐๐ฅ๐จ๐ฐ ๐ฅ๐๐ .
With no FVG, the swing low becomes the only PD array that price can use to displace higher.
We have seen that there are FLOD (Fair Value Gap), OD (Fair Value Area), and LLOD (Swing High) in an order flow leg. The last line of defence (LLOD) is the swing high.
๐๐ ๐จ๐ง๐ฅ๐ฒ ๐๐ฑ๐ฉ๐๐๐ญ ๐ญ๐ก๐ ๐๐๐๐(๐ฌ๐ฐ๐ข๐ง๐ ๐ฅ๐จ๐ฐ) ๐ญ๐จ ๐ก๐จ๐ฅ๐ ๐๐ง๐ ๐ ๐ฅ๐ข๐ช๐ฎ๐ข๐๐ข๐ญ๐ฒ ๐ฌ๐ฐ๐๐๐ฉ ๐ญ๐จ ๐ก๐๐ฉ๐ฉ๐๐ง ๐จ๐ง๐ฅ๐ฒ ๐ฐ๐ก๐๐ง ๐ญ๐ก๐๐ซ๐ ๐ข๐ฌ ๐ง๐จ ๐ ๐๐ ๐ข๐ง ๐ญ๐ก๐ ๐จ๐ซ๐๐๐ซ ๐๐ฅ๐จ๐ฐ ๐ฅ๐๐ .
With no FVG, the swing low becomes the only PD array that price can use to displace higher.
๐ถ๐๐๐๐๐ ๐๐๐๐๐๐๐ ๐ฟ๐๐๐ข๐๐๐๐ก๐ฆ ๐๐ค๐๐๐
๐๐ก๐๐ง ๐ญ๐ก๐ ๐๐ข๐ซ๐ฌ๐ญ ๐๐ฌ๐ญ ๐๐๐ง๐๐ฅ๐ ๐๐จ๐ฆ๐๐ฌ ๐ข๐ง ๐๐จ๐ง๐ญ๐๐๐ญ ๐ฐ๐ข๐ญ๐ก ๐ ๐๐ ๐๐ซ๐ซ๐๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐ซ๐๐ฃ๐๐๐ญ ๐ก๐ข๐ ๐ก๐๐ซ, ๐ฐ๐ ๐๐๐ง ๐๐ฑ๐ฉ๐๐๐ญ ๐ญ๐ก๐ ๐ง๐๐ฑ๐ญ ๐๐๐ง๐๐ฅ๐ ๐ญ๐จ ๐ฌ๐ฐ๐๐๐ฉ ๐ญ๐ก๐ ๐ฅ๐จ๐ฐ ๐จ๐ ๐ญ๐ก๐ ๐๐ข๐ซ๐ฌ๐ญ ๐๐๐ง๐๐ฅ๐ ๐๐ง๐ ๐๐ข๐ฌ๐ฉ๐ฅ๐๐๐ ๐ก๐ข๐ ๐ก๐๐ซ.
In this example, the first candle that comes inside the Daily FVG does not reject. The second candle sweeps the previous candle low to displace higher.
This happens so often. In the lower timeframe, we can see order flow legs going lower at first and then changing direction to displace higher
๐๐ก๐๐ง ๐ญ๐ก๐ ๐๐ข๐ซ๐ฌ๐ญ ๐๐ฌ๐ญ ๐๐๐ง๐๐ฅ๐ ๐๐จ๐ฆ๐๐ฌ ๐ข๐ง ๐๐จ๐ง๐ญ๐๐๐ญ ๐ฐ๐ข๐ญ๐ก ๐ ๐๐ ๐๐ซ๐ซ๐๐ฒ ๐๐ง๐ ๐๐จ๐๐ฌ ๐ง๐จ๐ญ ๐ซ๐๐ฃ๐๐๐ญ ๐ก๐ข๐ ๐ก๐๐ซ, ๐ฐ๐ ๐๐๐ง ๐๐ฑ๐ฉ๐๐๐ญ ๐ญ๐ก๐ ๐ง๐๐ฑ๐ญ ๐๐๐ง๐๐ฅ๐ ๐ญ๐จ ๐ฌ๐ฐ๐๐๐ฉ ๐ญ๐ก๐ ๐ฅ๐จ๐ฐ ๐จ๐ ๐ญ๐ก๐ ๐๐ข๐ซ๐ฌ๐ญ ๐๐๐ง๐๐ฅ๐ ๐๐ง๐ ๐๐ข๐ฌ๐ฉ๐ฅ๐๐๐ ๐ก๐ข๐ ๐ก๐๐ซ.
In this example, the first candle that comes inside the Daily FVG does not reject. The second candle sweeps the previous candle low to displace higher.
This happens so often. In the lower timeframe, we can see order flow legs going lower at first and then changing direction to displace higher
โข โข โข
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