liquidity: a complete guide

a thread 🧵 what is resting liquidity?

resting liquidity comes in 2 forms:

- buy stops
- sell stops

these resting liquidity zones when hit can cause:

- positions to exit (stops)
- breakout traders (new positions)
- liquidation runs

Price Action

- Market Structure
- Executing Structure change
- Bullish/Bearish Candles
- Entry confirmations

a thread 🧵 1. Market Structure

There is no definitive way to look at structure, it is something that is really dependent upon individual strategy/system.

I don't take so-called "HTF" trades. I approach the market daily, finding it most useful to track market structure by anchoring it to each individual day.

Doing this removes a lot of higher time frame noise, since i am 98% of the time in and out of a trade within the same day, I want to solely focus on that trend.

note - using range chart or non time-based charts can allow for a much cleaner view of that structure.

example ↓

Using Previous Day Values for Bias:

a thread 🧵 Previous day sweeps:

monitor above & below previous day for excess in:

- volume
- liquidations
- trapped traders in general

recognising a sweep above/below the previous day can help you get on the right side of a newly forming engulfing candle.

Candlestick Reversals

[patterns & confirmations]

a thread 🧵 Swing failures:

simple premise:
wick above or below a level with a close back in the opposing direction.

one of the more simple patterns although extremely effective if you know where to look for it.

It's extremely important not to trade these randomly but only at proven selective levels, especially at pivots/levels where others may stop out or pile in for a breakout trade.

some things I look for:

- internal liquidity [internal from major pivots - least expecting stops hit]
- distance between pivots - time to build up positions before stopping out
- sfp of specific sessions [of London high/low]

nonetheless, an sfp traps excess before allowing it to fuel a reversal.

note - invalidations for a swing failure pattern trade are commonly strictly above/below the sfp candle.

example ↓

In my daily routine checklist, the top priority is volume-based levels, one of them being high-volume nodes...

High Volume Nodes [HVN's]

a complete thread 🧵 1. what are high volume nodes

HVN's within a profile are not the highest points of volume [poc] but other points of high volume that still provide as useful s/r levels.

They are constructed through consolidation in which buyers and sellers reach a temporary equilibrium.

There is no set volume value required to determine a HVN; it is a subjective decision based on the volume profile, making HVNs relative to it.

This also shows how important it is to have correct volume profile pulls.

Footprint & TPO / Market profile

[videos with timestamps]

Essentials & strategies...

a thread 🧵 Orderflow & Footprint essentials

https://twitter.com/1468002736260235267/status/1770940317623075237

I spent years struggling to execute properly.

Here are my favoured entry patterns for intra-day trades.

Entry patterns - a complete thread 🧵 Structure Change

I use range charts in my trading career to reduce the noise found in time-based charts when tracking structure.

The range chart you choose depends on your asset. For BTC/USDT, I use the following:

- 500
- 750
- 1000
- 1500
- 2000
- 2500

The specific range depends on current volatility, aiming to see a new range candle printing every 2-5 minutes.

If you are using a time-based chart, I highly suggest the Williams Fractal Indicator to identify swing highs/lows.

More important is how to execute from a structure change. I only trade a structure change if the new major pivot created from it meets the following criteria:

- No poor high/low (a buying/selling tail)
- A spike in volume
- Preferably not within the London session
- Has seen general market aggression.

here is an example using range chart ↓

I've studied and researched reversals a lot, finding they often stem from peak local aggression.

[indicators & settings included]

Market Aggression [reversals] - a thread 🧵 Relative Volume

tracked using relative volume candles, I look for clear spikes in local volume to determine peak aggression.

important to note that this is most useful for me when monitoring specific POIs only, not just buying/selling off random prints.

Relative volume info:

> 1.8
> 2
> 3.5

threshold calculation type - relative
relative length - 25

indicator - volume suite by Leviathan

How I create intra-day bias

a thread 🧵 One-time framing

Is the daily time frame aggressively trending?

To do this, I check the daily time frame to see whether it is one-time framing in either direction.

Three or more consecutive days = aggressively trending.

If yes, i only take trades in that direction.

TPO [market profile] - a complete guide

...basics to advanced

a thread 🧵 1) How market profiles are formed:

Market profiles are formed based on how much time has been spent at individual price levels.

It will print letters in alphabetical order starting with A, and going on from there based upon your selected timeframe.

Volume Profile [updated] - a clear guide

a thread 🧵 1. Volume Profile Explained

Most volume tools will identify WHEN volume is coming in, whereas a profile will show at which price level volume has been transacted.

This is key as you can use that volume to determine where potential positions will defend/protect a level.

Delta - A Complete Guide

This will be my complete guide to understanding delta, whilst also covering its use cases for myself in my day to day trading.

a detailed thread 🧵 1. Overview of delta

"delta" is the value of difference between 2 things.

In the case of trading and particular footprint charts, delta is the difference between market buys and sells.

If there was $10m market buys vs $3m market sells, that would equal a delta value of +$7m.

Anchored VWAP

a thread 🧵 What will be covered:

- Placing from major pivot highs & lows
- At the start of ranges
- Breakout/impulse points

Important:

Ensure your anchored VWAP setting is set to "open" if you want to replicate my use cases.

Liquidity levels: executing using the footprint

- resting liquidity
- volume-based liquidity
- round number liquidity

I will cover how to find those levels & EXECUTE from them using the footprint chart:

a detailed thread 🧵 1) Resting liquidity

Consecutive series of higher lows or consecutive series of lower highs before a gap in PA.

The furthest away level is used as my POI, as that is when maximum local liquidity would have been taken.

Preferred time frames I use for this:

- 15m
- 1h

Footprint Charts - Execution Triggers

[simplified]

a thread 🧵 Trapped Traders

Waiting for large OI & delta spikes heading into a pre-planned level of interest.

Once those high OI & delta candles are engulfed in the opposite direction, it triggers an entry.

Invalidation - price un-trapping the new positions that have just been trapped.

Session Gaps - A different concept

a thread 🧵 This a something I have known about and used for a very long time.

In this post I will share with you the following:

- how to create custom session gaps
- how I use them
- why they can be useful
- using them for directional bias

Orderflow - How I use it & advice

a thread 🧵 Replay function exercise

Before we dive into the details, it is important that you are aware of the replay function available in Exocharts desktop.

Everything I will be going through in this post, you can practice repeatedly in drills using the replay feature.

Gaps: Explained

a thread 🧵 In this thread, I will cover the following:

- single print gaps
- other market profile inefficiencies
- my favourite gaps
- other nuances

Relative Volume: Entry Trigger

a thread 🧵 In this thread, I will cover the following:

- What relative volume is
- Why it's useful for entries
- How I use it
- Settings/Indicator used

POIs: Finding Levels to Trade

a thread 🧵 Morning Routine

General:
- previous d/w/m
- naked POCs d/w/m
- fixed range pulls

Bias:
- Poor highs/lows
- High hit rate levels
- What is the daily time frame trend?
- What is price doing today?

Liquidity:
- daily highs/lows
- resting 15m/1H liquidity
- SP ledges
- 30m POCs

Wick Fills: How they Create Bias

a thread 🧵 In this thread, I will cover the following:

- Why wicks fill
- Identifying large wicks
- Creating bias
- Partial fills