How to Trade Liquidity on the 5 Minute Chart Day Trading Strategy — Transcript

Full transcript

1. 0:00Most traders use liquidity wrong, but
2. 0:02what if I showed you how to spot it on
3. 0:03the 5-minute chart before the price even
4. 0:05starts to move. This is the very same
5. 0:07concept that I taught you on the daily
6. 0:08time frame, but this time we're diving
7. 0:10into the sniper zone where reversals
8. 0:12happen fast and fake outs are
9. 0:17fatal. Papu 84 says, "You did a video
10. 0:21for liquidity, but it was in a higher
11. 0:23time frame. Can you please make a video
12. 0:24for liquidity with 1 hour entries on a
13. 0:27lower time frame?" Absolutely, bro.
14. 0:29Let's get into it. Today, I'm going to
15. 0:31show you exactly how to identify lower
16. 0:33time frame liquidity, identify all of
17. 0:35the traps and nail the reversals with
18. 0:38surgical entries. Everyone loves trading
19. 0:40zones and levels, but they miss what
20. 0:42really causes price to reverse.
21. 0:44Liquidity hunts. Market makers push
22. 0:47price into liquidity to fill large
23. 0:50orders. Period. And they do it fast. So,
24. 0:52you can capitalize on this on the 1
25. 0:54minute and the 5-minute chart. If you
26. 0:56can spot where retail stops are sitting,
27. 0:58you can anticipate where the price is
28. 1:00going, not react to it. Liquidity is
29. 1:03areas where traders get stopped out or
30. 1:05trapped on the 5-minute chart. It could
31. 1:07be wicks or a swing high, equal highs,
32. 1:10clean support levels, all magnets for
33. 1:13price. Your job, find where the obvious
34. 1:16trades are sitting, and do the opposite.
35. 1:18The key is to look for clean price
36. 1:20action that's just a little too clean.
37. 1:23equal highs, trend lines, or zones that
38. 1:26look perfect. That's the bait. Now, here
39. 1:28is the step-by-step process on how to
40. 1:31spot lower time frame liquidity pools.
41. 1:34Number one, mark the higher time frame
42. 1:36liquidity zones first. Start with the
43. 1:38daily or the 4hour chart. Mark the most
44. 1:41recent swing highs and lows and clean
45. 1:43levels that haven't been tapped yet.
46. 1:45This is how you would mark up the chart.
47. 1:47you get it out to the daily time frame.
48. 1:49Take your horizontal position tool and
49. 1:51mark up all of the levels of support and
50. 1:54resistance so that you can have an easy
51. 1:56visual representation of the higher time
52. 1:59frame support and resistance levels.
53. 2:00Then you can identify areas that have
54. 2:03not been tapped yet where the liquidity
55. 2:06should be living. Drop to the 5minut or
56. 2:08the 1 minute chart if you're feeling a
57. 2:10little bit risky. Now zoom in. Look for
58. 2:13price rapidly approaching a zone. You
59. 2:16want to see volume spike, a quick tap,
60. 2:19and a rejection. Now that we have the
61. 2:21chart on the 5minut time frame, you are
62. 2:23simply waiting for one of these levels
63. 2:25to be hit and then you're looking for
64. 2:27that rejection wick. And because you
65. 2:30waited for that zone to get hit and
66. 2:32looked for that rejection there, you can
67. 2:34get into your scalping trade and get a 1
68. 2:36to2 risk-to-reward setup. Keeping in
69. 2:38mind that if price rejects the same area
70. 2:40twice, it could be a full reversal
71. 2:42double bottom with the bar not closing
72. 2:44below the area of support and resistance
73. 2:47that you marked up and getting another
74. 2:48trade 1:2 risk-to-reward ratio. Number
75. 2:51three, look for traps. Price will often
76. 2:54wick above resistance, pause, then dump
77. 2:58or wick below support and reverse. That
78. 3:02is your confirmation. And this is an
79. 3:04example of that trap. Price came down
80. 3:06and wicked below that level of support
81. 3:09and then reversed and again as it was
82. 3:12coming up wicked above that level of
83. 3:15resistance and came crashing down.
84. 3:17Always keep an eye out for the traps.
85. 3:19And number four, use volume or candles
86. 3:22for entries. Look for exhaustion
87. 3:24candles, long wicks, bearish or bullish
88. 3:27engulfing or a volume divergence. Now,
89. 3:30let's break this down on a real trade I
90. 3:32took using this method. As you can see
91. 3:34here, I've marked up the higher time
92. 3:36frame zone on the daily time frame. So,
93. 3:39starting at the week's open, we could
94. 3:41see this huge gap and the price dipped
95. 3:44below that level of support that I had
96. 3:46already marked up on the higher time
97. 3:48frame. And during London session, you
98. 3:51could see the price started to come down
99. 3:53to that support zone a little bit more.
100. 3:56Now zooming in, you can see we had rapid
101. 3:59price movement to that zone, an
102. 4:01engulfing candle, which both of these
103. 4:03candles were with wicks and then we had
104. 4:05that rejection up. That's when I was
105. 4:07able to enter my trade at 61408 on
106. 4:11Australian dollar. I kept my stop loss
107. 4:14below the current London low and all I
108. 4:17had to do was shoot for a 1:2
109. 4:19risk-to-reward ratio. This was using
110. 4:21higher time frame support and resistance
111. 4:23and being able to scalp it on the five
112. 4:25minute time frame with anticipation of
113. 4:27price movement upwards because of the
114. 4:30huge gap that was left over the weekend.
115. 4:32So, I have some bonus tips for you.
116. 4:34Number one, avoid entering before the
117. 4:37price taps the liquidity zone. Wait for
118. 4:39confirmation. Number two, use session
119. 4:42times like the London or New York open.
120. 4:45That's when the most stop hunts happen.
121. 4:47And number three, do not chase the
122. 4:50breakouts. Wait for price to trap
123. 4:52traders and fade the move. Lower time
124. 4:55frame liquidity is one of the most
125. 4:57powerful tools you can use in your day
126. 4:59trading, but only if you know what to
127. 5:01look for. So, if you have a specific
128. 5:02question in day trading, leave it in the
129. 5:04comment section down below. And if you
130. 5:06got value out of this video, make sure
131. 5:08you drop a like on your way out. And we
132. 5:10will see you in the next