Full Transcript

Secrets To Identifying Correct Liquidity

7:58710 summary words · ~4 min readEnglishBy Inter Equity TradingTranscribed Jul 30, 2026

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Summary

High-density liquidity only exists at swing points where retail traders have actively entered trades and placed their stop-loss orders.

Understanding which structural points hold real liquidity prevents you from picking invalid target highs/lows that market makers have no incentive to reach.

Section summaries

Introduction & Trading Philosophy

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The instructor introduces the session's topic on identifying high-density liquidity points on price charts. He cautions against the popular belief that every single high and low carries actionable liquidity, emphasizing that traders must differentiate between important and irrelevant structural points. He stresses that students must focus on market logic and retail psychology rather than memorizing fixed chart patterns.

Not all swing highs and swing lows contain equal liquidity.
Successful SMC trading relies on understanding order flow logic rather than memorizing visual chart patterns.

Establishes the key philosophical mindset required to analyze the technical examples that follow.

How Liquidity is Generated (Bullish & Bearish)

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The instructor illustrates how retail traders interact with Break of Structure (BOS) points across both bullish and bearish market structures. He demonstrates that when price respects an extreme demand or supply zone and moves away, retail traders enter positions and place stop-losses behind that structural boundary. It is this specific sequence—respecting a level and moving away—that officially creates actionable liquidity for institutional traders.

A swing point only gains liquidity after price reacts off it and moves away, trapping retail stops.
Retail break-of-structure entries create predictable clusters of stop-loss liquidity.

Delivers the core mechanical definition of how liquidity pools are formed on a chart.

Retail Inducement & Stop Hunt Mechanics

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This section walks through the step-by-step process of how market makers induce retail traders into taking low-probability trade setups. The instructor shows how price gives a temporary reaction off a zone to convince retail traders to enter with stop-losses positioned above or below structural lines. Once sufficient stop-loss volume is accumulated, price violently reverses to run through those exact lines.

Initial price reactions at retail order blocks are often engineered to induce entries.
Target the stop-loss placements of induced retail traders rather than trading alongside them.

Explains how to exploit retail stop-loss placement for trade entry targets.

Identifying Highs and Lows Without Liquidity

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The instructor examines scenarios where structural extremes lack liquidity entirely. He shows that when price sweeps a liquidity pool from point A to point B and aggressively sells off, the high created at point A contains no remaining liquidity because no retail stops reside above it. Traders who blindly target such highs for continuation buys frequently get caught in false breakouts.

Swing points created purely by sweeping prior liquidity do not contain remaining stop-loss pools.
Targeting liquidity-barren structural extremes often results in immediate rejections and losses.

Solves a critical and frequent mistake made by traders targeting incorrect swing points.

Bearish Liquidity Sweeps & Execution Conditions

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The instructor provides the bearish counterpart to the previous liquidity concept, demonstrating how sweeping a structural low fuels a bullish move. He reiterates that traders must wait for price to respect a newly formed level and push away before assuming a fresh liquidity pool exists. He concludes by emphasizing that market structure and market liquidity are inseparable concepts.

Liquidity must be regenerated via a fresh rejection before a level can be re-targeted.
Market structure exists fundamentally to create and seek liquidity.

Reinforces concepts covered earlier using a bearish chart example alongside final takeaways.

Key points

Liquidity Requires Retail Confirmation — Liquidity is not automatically present at every swing high or low. A structural level only becomes a true liquidity pool after retail traders get induced to enter positions from it and price respects the level by moving away.
Sweep-Created Highs and Lows Lack Liquidity — When a swing point is formed purely because price swept prior liquidity and immediately reversed, that new extreme point leaves no remaining liquidity behind it.
Retail Inducement Fuels Institutional Moves — Market makers require counterparty volume to fuel major moves, which they engineer by letting retail traders take Break of Structure (BOS) setups and cluster stop-losses above or below key zones.

“We're not trading off patterns, we're trading off logic and understanding.” — Unidentified Instructor

“Since we have now respected this red box, respected this low from the left-hand side, and again, moved away to the upside, we now have liquidity at this low.” — Unidentified Instructor

AI-generated from the transcript. May contain errors.

0:00

What's going on guys? Today I have a

0:02

great video for you all. It's not going

0:04

to be too long of a video, but it's

0:06

going to be very very powerful and

0:09

important for you all. So, it's going to

0:11

be how to identify which highs and lows

0:15

have liquidity. So,

0:18

a lot of people

0:19

in the community, they like to say that

0:21

there's liquidity above every high and

0:24

every low. To a certain degree, yes,

0:27

that is correct, but what we have to be

0:29

able to identify is basically like the

0:33

important liquidity, okay? Where retail

0:35

traders are trading at and from. All

0:38

right, so we're going to get right into

0:40

a couple examples here. Okay? And again,

0:43

I want you guys to understand that I'm

0:46

not going to be drawing out these

0:47

diagrams for you to find these kind of

0:50

like a as like a pattern on your own

0:52

charts. You have to make sure you

0:53

understand these diagrams, okay? We're

0:55

not trading off patterns, we're trading

0:58

off logic and understanding. Okay?

1:00

Again, how to identify which highs and

1:02

lows have liquidity. I can run through a

1:06

bullish example to begin with. What do

1:08

we have

1:09

here? So, we can see

1:12

that the market has printed a high, a

1:15

low, and then we've went bullish and

1:17

printed a new high, okay?

1:19

As we know, once taking out previous

1:22

high here, retail will like to trade

1:25

from these lows.

1:27

Okay? That's just how retail mindset is,

1:30

how retail strategies work. They want to

1:31

see a BOS in the market, and again, once

1:33

we approach these areas like this, the

1:35

extreme, this is where they will be

1:37

entering buy positions. Okay? We want to

1:41

see the market react and move away.

1:44

Okay? Telling me that buyers have now

1:49

entered positions in this area,

1:51

okay? And then look how the market even

1:53

puts them in profit, okay? That's fine.

1:56

I want you guys to understand that since

1:58

we have now respected this red box,

2:00

respected this low from the left-hand

2:02

side, and again, moved away to the

2:04

upside, we now have liquidity at this

2:07

low. So, this right here is actually so,

2:11

so powerful, yet not really looked at

2:13

quite a bit. Okay? Same thing

2:16

goes for a bearish example.

2:22

Okay. So, again, here we have low, high,

2:26

and low.

2:27

Taking out previous low, so again,

2:30

retail will see this as a BOS in the

2:31

market. This is where they will be

2:34

selling from. We do not want to look for

2:36

entries from here, okay? Cuz this is a

2:38

low-probability setup, and we don't

2:40

always know when the market will respect

2:43

retail strategies and when it won't. So,

2:45

we let the market react from it. Now we

2:48

understand that there's liquidity above

2:50

this high. And you can use this to your

2:53

benefit. So, let's say we are trying to

2:56

look for a buy scenario, and we're

2:57

moving to the upside, and then we

2:59

approach these highs, okay? Remember, we

3:02

understand now that retail has entered

3:05

positions here with stop-losses above

3:07

the high, aka the black line.

3:10

Okay? Use that to your advantage. All

3:12

right? What do I mean by that?

3:15

If now we move away,

3:18

okay? And again, this is where retail is

3:20

induced from.

3:22

Why?

3:23

Same thing. BOS to downside.

3:26

Okay? So, retail is looking to sell

3:28

anywhere within this red box area. Look

3:30

how it gives them a reaction to the

3:31

downside.

3:33

Here's a BOS for them as well.

3:36

And then all of a sudden what the market

3:37

will do

3:38

is it'll run bullish back to the upside.

3:41

So, again, I want you guys to understand

3:44

the logic of these diagrams that I have

3:47

drawn out in front of you, okay? I don't

3:49

want you guys to look at them as

3:50

patterns, because if you look at these

3:52

as patterns, then you'll just get

3:53

yourself wrecked in the market, okay?

3:55

We're not pattern traders here. You need

3:56

to make sure you add logic and reasoning

3:59

to your analysis, okay? So, now that we

4:01

know which highs and lows have liquidity

4:04

above them and below them,

4:06

now we need to go through which highs

4:07

and lows don't have liquidity above and

4:11

below them, okay? Again, very simple

4:14

concept, but very very powerful.

4:17

So,

4:22

just like we drew before,

4:24

okay?

4:25

Market has respected the low and moved

4:26

away, which means we now have liquidity

4:28

below these lows, okay?

4:31

What will tend to happen

4:32

is the market will hunt for it, okay?

4:34

Now, in this situation right here, what

4:36

have we done?

4:37

We have swept liquidity to the upside,

4:43

okay?

4:44

And now,

4:46

if we move away, we have swept liquidity

4:49

to the downside as well, okay? Now,

4:51

again, this can be very simple, but very

4:54

powerful.

4:55

A lot of traders will look to trade

4:57

since we have taken liquidity to the

4:59

downside, they immediately want to look

5:01

for buys back up. But, the question you

5:03

got to ask yourself is, what are you

5:04

targeting, right? Why are we going to

5:07

target this high up here?

5:10

From this point, from this high, all we

5:12

have done is swept liquidity, okay?

5:15

Swept the previous high, which allowed

5:17

us to go bearish from A

5:19

to B,

5:20

okay?

5:21

Leaving no liquidity

5:24

whatsoever at this high. So, a lot of

5:27

traders make the mistake of

5:31

looking to trade bullish into the high,

5:33

okay? And then maybe you guys get a

5:35

reaction

5:36

and then

5:38

sells off again.

5:40

Why?

5:42

That's because we had no liquidity above

5:45

this high,

5:46

right? Again, all we've done from this

5:48

point is swept this this high over here,

5:50

this structural high.

5:52

And then from A

5:54

to B, we sold off, okay? Leaving no

5:57

liquidity above this high.

5:58

But look what's happened now.

6:01

We have respected this high.

6:04

Right? We've went bullish after taking

6:06

the lows, approached the highs over

6:07

here, respected them, moved away. So,

6:10

what does that now tell me? Same

6:11

concept. We now have liquidity above

6:14

this high.

6:16

All right?

6:17

Same thing with the bearish scenario.

6:20

Let's go through this.

6:32

So, retail induced and then they enter

6:35

sell positions up here. So, now we have

6:37

liquidity above these highs, just like

6:39

we spoke about before.

6:41

Okay?

6:41

Then, what will happen?

6:44

Boom. We run that liquidity, okay?

6:48

That bullish move from A to B was fueled

6:53

because we swept out the liquidity at

6:55

this low here.

6:57

Okay? So, again, grabbing that

6:58

structural low,

7:00

printing this low in the market here,

7:06

and then moving bullish to the upside,

7:08

okay? Again, what a lot of traders will

7:10

make the mistake of doing is immediately

7:12

immediately looking for sells when there

7:14

is

7:17

no liquidity here yet. But again, look

7:19

what I've just drawn on.

7:21

Low, respected, low,

7:24

which means

7:28

now we have liquidity.

7:32

Now we have liquidity below this low.

7:35

Okay? So, again, these are very very

7:37

simple concepts, but very very powerful.

7:41

If you don't understand that structure

7:43

is liquidity, the market will keep

7:45

humbling you over and over. But if

7:47

you're ready to finally get it and learn

7:48

how we actually trade, hit the link in

7:50

the description. You can steal our

7:52

entire strategy for free and trade with

7:55

us live.

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