Understanding Trading Liquidity Levels The Right Way - Final Part

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Hello everyone, hope you all are doing good? I'm back with the Part 2 and Final Part of this amazing series, Understanding Trading Liquidity Levels The Right Way. If you haven't read the Part 1, I strongly suggest you that by clicking here. In today's article we would be looking at how we can trade the Liquidity Levels the right way.


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To be able to trade the Liquidity Levels the right way adequately, you should be able to know how to avoid Fakeouts, and how can you avoid fakeouts? You can avoid fakeouts through Trend confirmation and I know of two very reliable Trend confirmation strategies, which are Market Structure Breakout(MSB) strategy and Break Retest Break(BRB) strategy.


Break Retest Break Strategy


I will be starting off with BRB strategy for trend confirmation in order to trade the Liquidity levels the right way, more adequately.


Trend Confirmation

To confirm trends using the BRB, you have to follow the criteria below. Trend confirmation can also be known as Trade entry criteria.


  • Mark your resistance or support liquidity levels, depending if you are entering either a buy trade or a sell trade.

  • Wait for breakout on your marked resistance or support liquidity levels.

  • Wait for it to hits swing high and retest back, but ensure it doesn't go below your support or resistance liqiuidity level.

  • Wait for it break out of the Swing high or low points after the retest.


If this occurs, then, you have confirmed the trend of the market. Take a look at the image below for more understanding.


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Trade Criteria

To make an actual trade, you have to ensure you place your stop loss, to avoid losing your funds and set a Take profit. Below are trade criteria using BRB strategy when trading liquidity levels the right way.


  • Enter your trade as soon as you notice, that the price has broken the Swing High or Low points.

  • Set your Stop Loss just above your support levels or below your resistance levels.

  • Set your Take Profit using a 1:1 Reward/Ratio


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Market Structure Breakout Strategy

The second trend confirmation strategy is the MSB. Knowing how this strategy works, will ensure greater trade success when trading Liquidity levels the right way.


Trend Confirmation

To confirm trends using the MSB, you have to follow the criteria below. Trend confirmation can also be known as Trade entry criteria.


  • You have to look out for a zigzag downward or upward price movement, depending if you entering either a sell or a buy trade.

  • There should be a price reversal i.e the price should change direction and go the opposite direction.

  • Then map out a market structure neckline.

  • Wait for the price to breaks pass the market structure neckline.


If this occurs, i.e the price breaks pass the market structure neckline, then, you have confirmed the trend of the market. Take a look at the image below for more understanding.


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Trade Criteria

To make an actual trade, you have to ensure you place your stop loss, to avoid losing your funds and set a Take profit. Below are trade criteria using MSB strategy when trading liquidity levels the right way.


  • Enter your trade as soon as the price breaks the market structure neckline.

  • Set your Stop Loss just above Lower High Point or below Higher Low Point.

  • Set your Take Profit using a 1:1 Reward Ratio


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I hope you all found the article interesting and exciting. Do well to share your thoughts about the article in the comment section below. Thanks.

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Thanks For Reading

Till Next Time, Stay Safe



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