UNDERSTANDING LIQUIDITYIn this quick and easy lesson, I will break down the concept of liquidity.
If you retain the thought that liquidity stands for an area where stop losses are you will grasp this concept quickly.
We often see spikes into areas of liquidity before true moves continue, this is so that banks can capture as many orders as possible before they depart from the area.
Hunt
How Stop Hunts workQuick thoughts on recent price action.
Shows possible thought process of whales / market makers.
So for my Stop Loss settings, I ask myself:
-Where are everybody else's stops? (too much of a target)
-If I put my stop above/below, what happens to my Risk v Reward formula?
-If I can not my stop above/below, am I just asking to LOSE that stop?
