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I Found the Perfect Liquidity Setup (90% Accuracy) — Transcript

by Smart Risk · 2,560 words · 433 segments · language en · Watch on YouTube

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0:00Hey traders, and welcome back to another
0:02episode of Smart Risk. In today's video,
0:05I'm going to break down one of the most
0:07powerful smart money concepts and ICT's
0:10trading strategy. A strategy that has
0:12the potential to skyrocket your win rate
0:15and help you consistently find A+
0:17setups.
0:18This is not just a random setup or some
0:20basic concept. It's an advanced trading
0:22model that combines liquidity, fair
0:25value gaps, and market session timing
0:27into one complete system.
0:29So, make sure you watch until the end
0:31because I'm going to walk you through it
0:33step-by-step and show you exactly how to
0:35apply it on your own charts using clear
0:38mechanical rules and a clean, actionable
0:40roadmap.
0:42We always appreciate your support. So,
0:44please give this video a thumbs up and
0:46subscribe to our channel if you are new.
0:48See you after the intro.
1:00Welcome back, traders.
1:01So, let's get started. This powerful
1:04trading model is one of the most
1:06effective strategies you can use in
1:08today's markets.
1:09It works so well because it combines
1:11multiple key elements into one complete
1:13system.
1:15Higher time frame dynamic liquidity
1:16delivery, external liquidity sweeps, and
1:19session timing all aligned within a
1:21single trading plan.
1:23And when all of these factors come
1:24together, they create high probability
1:27setups that can consistently deliver A+
1:29trades with strong win rates.
1:32In a bullish scenario, this setup forms
1:35when price sweeps sell-side liquidity
1:37from a key level right before tapping
1:39into an unmitigated bullish fair value
1:41gap.
1:42Then price quickly reverses back inside
1:45the range of that key level and
1:46continues pushing higher.
1:48But keep this in mind. Not every
1:51liquidity sweep at a random time,
1:53combined with a random fair value gap,
1:55will yield A+ setups.
1:58For the best results, you need proper
1:59alignment with specific time windows and
2:02time frames.
2:03In a bearish scenario, the same concept
2:06applies in reverse.
2:08Price sweeps by-side liquidity from a
2:10key level at a specific time,
2:12taps into an unmitigated bearish fair
2:14value gap, and then quickly reverses
2:17back inside the range before continuing
2:19lower.
2:20But once again, for this setup to work
2:22properly, certain conditions must be
2:24met.
2:25Before we go deeper into those
2:27conditions and see exactly how this
2:28setup plays out, let's first understand
2:31what actually makes this setup so
2:32powerful.
2:34The logic behind this setup is simple,
2:36but extremely effective.
2:38The real edge appears when the market
2:40sweeps liquidity and mitigates a fair
2:42value gap at the same time.
2:44When price takes liquidity near a key
2:46level, such as a swing high or swing
2:49low,
2:49while also filling a fair value gap, it
2:52removes two major sources of pressure
2:54from the market at once.
2:56First, the liquidity imbalance inside
2:59the fair value gap, and second, the stop
3:02losses of early traders who entered too
3:04soon.
3:05Once both of those are taken out, the
3:07path becomes much cleaner for price to
3:09move decisively toward the next
3:10liquidity pool.
3:12And that is exactly what makes this
3:13setup so effective.
3:15It's not just a technical pattern. It's
3:17built on real market logic.
3:20Now, let's break this setup down
3:21step-by-step and see exactly how to
3:23execute trades with it.
3:25To take advantage of this powerful setup
3:27in a bearish scenario, the first step is
3:29to identify a previous session high that
3:32sits just below an unmitigated 15-minute
3:34fair value gap.
3:36For example, if you're trading the
3:38London session, you want to focus on the
3:40Asian session high that forms right
3:42below a 15-minute unmitigated fair value
3:45gap.
3:46Then, wait for London to open and
3:48monitor price action closely.
3:51Once price sweeps the liquidity above
3:53the Asian high,
3:54taps into the 15-minute fair value gap,
3:57and then quickly reverses back inside
3:59the range.
4:00That gives you your first layer of
4:02confirmation.
4:04From there, we zoom into a lower time
4:06frame, such as the 5-minute or 1-minute
4:08chart, to track the higher time frame
4:10delivery and look for reversal
4:12confirmations.
4:14This is where your entry model must
4:15appear before opening a trade.
4:18At this stage, if I'm using the 1-minute
4:21chart, I usually prefer to look for an
4:23inversion fair value gap forming right
4:25after the liquidity sweep.
4:27But if I'm using the 5-minute chart, I
4:29prefer looking for a breaker block,
4:31mitigation block, or IFVG
4:35that forms after the manipulation move.
4:37Now, in the next step, if we are using
4:39the 1-minute time frame, we look for a
4:42violated fair value gap that flips into
4:44an inversion fair value gap.
4:47This becomes our second layer of
4:48confirmation.
4:49Once the IFVG forms, it often acts as a
4:53new resistance level, giving us a strong
4:55area for a potential sell entry.
4:58And if a market structure shift happens
5:00at the same time, that adds another
5:02powerful layer of confluence and makes
5:04the setup even stronger.
5:06With these confirmations in place, we
5:08can expect price to retrace back into
5:10the IFVG,
5:12now acting as resistance, before
5:14continuing lower toward the next
5:16sell-side liquidity pool.
5:18For placing an entry using this model,
5:20you have two options.
5:22But before we get into them, keep in
5:24mind that you can always add extra
5:25confluences, such as a V-shaped recovery
5:28or a change in the state of delivery.
5:31Now, here's exactly how I place the
5:32entry.
5:34Option one,
5:35enter immediately after the IFVG forms
5:39by opening your position at the next
5:40candle open
5:42with the stop-loss placed above the most
5:44recent swing high.
5:45Option two,
5:47place a sell limit at the lowest point
5:49of the newly formed IFVG
5:52and wait for price to retrace into the
5:54zone and activate your entry.
5:56For take profit, you have a few choices.
6:00You can target the nearest sell side
6:01liquidity point on the 1-minute time
6:03frame. Or if you're aiming for a bigger
6:05move, target the Asian session midpoint
6:08or the Asian low.
6:10Another clean approach is using a fixed
6:12risk to reward target like 2.5 or 3 R to
6:16R depending on your style.
6:19Now, in cases where price has already
6:21started moving in my expected direction
6:23and my first position is already running
6:25in profit while there is still enough
6:27room for price to continue lower,
6:29I often look for an add-on continuation
6:32entry.
6:33This usually happens when price creates
6:35a new bearish fair value gap during the
6:37bullish pullback that follows the new
6:39break of structure.
6:41In that case, the next unmitigated
6:43bearish fair value gap becomes our
6:45second entry point where we can place
6:47another sell limit order with the stop
6:49loss a few pips above the most recent
6:51swing high.
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7:34However, if you choose the 5-minute
7:36chart as your entry time frame, then
7:38right after the liquidity sweep and
7:40higher time frame fair value gap
7:42delivery, you must look for either a
7:44breaker block or a mitigation block.
7:47For a valid bearish breaker block, price
7:49should first create a swing high, then a
7:52swing low, followed by a higher high.
7:55After that, we need to see an immediate
7:58bearish expansion that breaks the
7:59structure and confirms the shift.
8:02In this case, the down close candle, or
8:05series of down close candles, formed
8:07between the first swing high and the
8:09swing low, becomes your breaker block
8:11zone.
8:12This is the area where we plan our short
8:14entry.
8:15The next step is to place a sell limit
8:17order at the lowest point of that
8:18breaker block and wait for the price to
8:20retrace into it.
8:22Now, keep in mind, this is different
8:25from a mitigation block because with a
8:27mitigation block, we look for a lower
8:29high, not a higher high.
8:31So, for a valid bearish mitigation
8:33block, the price must first create a
8:36swing high, then a swing low, followed
8:39by a lower high.
8:40After that, we need to see a strong
8:42bearish displacement that breaks below
8:44the previous swing low.
8:46In this case, the mitigation zone
8:47becomes the last down close candle, or
8:50series of down close candles, formed
8:53between the first swing high and the
8:55swing low.
8:56Then, we place a sell limit order at the
8:58lowest point of that mitigation block
9:01with a stop loss a few pips above the
9:03nearest swing high and wait for the
9:05price to retrace into the zone.
9:08If the first trade is already running in
9:10profit, we can always add another
9:12position as a continuation setup if
9:15price forms a new bearish fair value gap
9:17during the next pullback.
9:19In that case, the next unmitigated
9:21bearish fair value gap becomes our
9:23second entry zone.
9:25Now, before going any further, let's go
9:27through a few pro tips.
9:30Usually, the higher time frame fair
9:32value gap forms after price experiences
9:35a strong move during the previous day's
9:37session or over the past few sessions.
9:40Also, this setup can remain valid every
9:42time price sweeps a previous session
9:44high and fills the higher time frame
9:47fair value gap.
9:49But, keep this in mind.
9:51This setup only remains valid until
9:53price fully mitigates that 15-minute
9:55fair value gap.
9:57So, the moment the upper fair value gap
9:59is completely filled the setup starts to
10:02lose its probability and is no longer as
10:04reliable.
10:05Let's put everything together and move
10:07into some real chart examples to see
10:08exactly how to apply this trading model
10:10step by step. Here we have the
10:12Euro/Dollar 15-minute chart on the
10:14screen.
10:16As you can see, price created a large
10:18unmitigated fair value gap during the
10:20Asian session and it has remained
10:22unfilled for some time.
10:25And if you look closely, you'll also
10:27notice that the New York session high is
10:28sitting just below that higher time
10:30frame fair value gap.
10:33So, everything we need for this setup is
10:34already in place.
10:36We have an unmitigated bearish higher
10:38time frame fair value gap.
10:41And we also have a key buy side
10:42liquidity level created by the New York
10:44high sitting right beneath it.
10:47That means all the conditions are met.
10:50So, now the next step is simple.
10:52We wait for the price to sweep the New
10:54York high, tap into the higher time
10:56frame fair value gap and then reject
10:59back below the range.
11:01Now, as you can see, once London opens,
11:04price starts pushing higher.
11:07After sweeping the New York high and
11:08tapping into the 15-minute fair value
11:10gap it begins to show rejection.
11:14At this point, I zoom into the 1-minute
11:16chart to closely monitor for reversal
11:18signs.
11:21Now, here on the 1-minute chart, you can
11:23clearly see that after sweeping the
11:25liquidity above the New York high and
11:27delivering into the higher time frame
11:29fair value gap price immediately drops
11:32back inside the New York highs range.
11:35At this point, everything looks clean.
11:37But before opening a position, we still
11:40need an entry model to appear.
11:42If you look closely, you can see that
11:44after entering the manipulation phase
11:46and mitigating the higher time frame
11:48fair value gap,
11:50price starts pushing lower and first
11:52violates this large bullish fair value
11:54gap, flipping it into an inversion fair
11:56value gap.
11:58Then, at the same time, price gives us a
12:00CISD confirmation by closing below the
12:03bullish candles that led into the sweep,
12:06while also forming a market structure
12:08shift.
12:09That gives us full confirmation.
12:12Once the IFVG forms, it is likely to act
12:15as a new resistance zone, giving us a
12:17strong area for a sell entry.
12:20So, in the next step, I immediately open
12:22a sell position at the open of the next
12:25candle, right after the IFVG forms, with
12:28the stop loss placed above of the most
12:30recent swing high.
12:32For take profit, I target the nearest
12:34buy side liquidity on the current time
12:37frame, which gives us almost a 2.5
12:39R-to-R setup.
12:41Now, let's play the chart forward.
12:50As you can see, after a short drawdown,
12:53price pushes lower and eventually hits
12:55the take profit cleanly.
12:57Now, let's move on to the next real
12:58chart example.
13:01Here, once again, we have the Euro
13:03dollar 15-minute chart on the screen.
13:05As you can see, we have an unmitigated
13:0715-minute bullish fair value gap formed
13:10during the London session, sitting just
13:12below the New York low.
13:14So, the next step is to wait for the
13:15price to sweep the New York low, tap
13:18into that fair value gap, and then
13:20immediately show rejection.
13:24Now, if If play the chart forward, you
13:26can see that as Asia closes, price
13:29pushes lower, sweeps the lowest point of
13:31the New York low, and then immediately
13:33starts to reject.
13:35At this point, I zoom into the 1-minute
13:38chart to closely monitor for reversal
13:40signs and a valid entry.
13:44Now, here on the 1-minute chart, price
13:46has formed a bullish market structure
13:48shift along with a breaker block.
13:53We have a swing low, then a swing high,
13:56followed by a lower low, and finally a
13:58bullish displacement move that breaks
14:00the structure and confirms the shift.
14:04So, in this case, the breaker block zone
14:05becomes the two consecutive up close
14:07candles formed between the first swing
14:09low and the swing high.
14:12With these confirmations in place, we
14:14can anticipate that the price will
14:15retrace back into the breaker block zone
14:18before continuing higher.
14:20So, in the next step,
14:22I place a buy limit order at the highest
14:24point of the breaker block with the stop
14:26loss below the swing low.
14:29For take profit,
14:31I target the nearest key buy-side
14:33liquidity on the current time frame,
14:35which gives us almost a 3.5 R2R setup.
14:40Now, let's play the chart forward.
14:42As you can see, my order gets triggered
14:44and the price continues pushing higher
14:46as expected.
14:48Now, in cases where price has already
14:50started moving in my expected direction
14:53and my first position is already running
14:55in profit, I often look for an add-on
14:57continuation entry.
14:59This usually happens when price forms a
15:01new bullish fair value gap during the
15:03pullback that follows the new break of
15:05structure.
15:07So, here, for my second entry, I place a
15:10buy limit order at this bullish 1-minute
15:12fair value gap
15:14with the stop loss set a few pips below
15:15the most recent swing low
15:17while targeting the London high.
15:27>> Now, let's see what happens next.
15:30As you can see, price pushes slightly
15:33lower, triggers our second buy order,
15:35and then quickly reverses with strong
15:37bullish momentum, eventually hitting the
15:39take profit on both trades, once again
15:41proving how effective this model can be.
15:45That's it, traders. Thanks for watching.
15:47I hope you found this video valuable. If
15:50you did, hit subscribe and turn on
15:51notifications so you never miss an
15:53update. Drop a comment below with your
15:55thoughts or topics you'd like to see
15:57next.

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