Liquidity Inducement Masterclass Ep. 3 | Inter Equity Trading — Transcript

Full transcript

1. 0:00What's going on guys? Welcome back to
2. 0:01another inter-equity trading video.
3. 0:03Today we're hopping right back into a
4. 0:05liquidity inducement masterclass. So
5. 0:07we've had a lot of comments recently
6. 0:09about uploading a part three, maybe even
7. 0:11a part four. So I thought it was time to
8. 0:13dive more into depth about liquidity and
9. 0:16inducement. So this whole video we're
10. 0:18going to be covering again in depth
11. 0:20focusing on liquidity
12. 0:22and inducements. Let's hop right into
13. 0:23the charts.
14. 0:33All right. So I have a piece of price
15. 0:34action in front of us right now on NQ.
16. 0:37Again, the whole exercise, the whole
17. 0:38purpose of this video in front of us
18. 0:40right now is we're going to focus a lot
19. 0:42on liquidity. Of course, we usually do
20. 0:44that, but again heavily into liquidity
21. 0:46and inducements. Okay, understanding
22. 0:48basically the why, the intentions behind
23. 0:51all these moves we're seeing. So we're
24. 0:53using the replay tool. This is actually
25. 0:55a trade I took and we'll cover
26. 0:57um entries, managing the trade overall,
27. 0:59stop loss targets, all that good stuff
28. 1:01later in the video. However, let's focus
29. 1:03on this current price action right now.
30. 1:05This is fast forwarded to Friday. Okay,
31. 1:09and this is right now in London session.
32. 1:10So remember, I'm on Eastern Standard
33. 1:12Time, EST. So right now this is 3:00
34. 1:14a.m. This is London. And if I just track
35. 1:17price that's been delivered ever since
36. 1:19Thursday New York, we can see that we
37. 1:21have built a significant amount of
38. 1:24liquidity here. Okay, and if I open up
39. 1:27the 5-minute chart and kind of just
40. 1:29follow back with price. Look what we did
41. 1:31on Thursday. We had a move to the
42. 1:34upside. This was off the back of stock
43. 1:36open. So you can see look at this
44. 1:37bullish follow through stabbing out
45. 1:39internal highs and then we sold off.
46. 1:41Ever since then, this was New York on
47. 1:44Thursday, we respected this high right
48. 1:46here multiple times. Okay, so look how
49. 1:50we sold off. Again, price returned back
50. 1:51to this point here. Once, twice, three
51. 1:55times, four times, and then a move to
52. 1:57the downside. That right there tells me
53. 1:59we have left a significant amount of
54. 2:01liquidity above this high, and this is
55. 2:02very important here. Right? I don't want
56. 2:04you guys to think oh, just because we
57. 2:06take out maybe these highs over here, we
58. 2:07should start looking for shorts back
59. 2:09down. No, that's not how it works. We've
60. 2:10I I just identified a level of liquidity
61. 2:13to the upside, okay? Sellers enter
62. 2:16positions here. And then look at this,
63. 2:17from that point, again, Thursday New
64. 2:19York, we sold off again. So, when we
65. 2:22take out these lows, understand the
66. 2:24purpose of this move here. This induces
67. 2:27sellers, so let's mark on
68. 2:30sellers induced here. When we take out
69. 2:32these old lows, this induces sellers,
70. 2:34and then price
71. 2:36returns back into these levels here,
72. 2:37again, sells back off. Look, what did we
73. 2:40do? Took out another low to the left,
74. 2:42again, inducing sellers into the market,
75. 2:45okay? So, we're going to
76. 2:46track price, continuously track price,
77. 2:48so we can understand the whole intention
78. 2:50behind all these moves. So, what we can
79. 2:51see here is over and over and over, we
80. 2:53continuously take out lows, we get a
81. 2:55pullback, respecting liquidity. Right?
82. 2:58What do I mean by that? You can see here
83. 2:59this high is respecting all of these
84. 3:01highs over and over and over. So, we are
85. 3:04simply just building liquidity above
86. 3:05here, that's very simple, very
87. 3:07straightforward, and again, sell off
88. 3:08back down to the downside. If you could
89. 3:10look at this price action, chop, chop,
90. 3:12chop, chop, and then we sell off again,
91. 3:14trading below old lows. So, we can all
92. 3:17agree here, after what we just
93. 3:19explained, we have built a significant
94. 3:21amount of sellers to the upside. Um and
95. 3:23again, selling back off. Now, let's look
96. 3:25at the left. And if I go back onto the
97. 3:2715-minute chart, what are we starting to
98. 3:28tap into? So, this area to the left-hand
99. 3:30side is grabbing my attention, so let's
100. 3:32grab a red box here and mark this on.
101. 3:36Just like that. So, we have tapped into
102. 3:38this area once,
103. 3:40twice, and now we're hap- it's happening
104. 3:42again, right at London open. Okay? So,
105. 3:44overall, I view this as liquidity. Um
106. 3:47some some of you guys might say, "Why?"
107. 3:48If I just go into a lower time frame,
108. 3:50let's hop into the 1-minute chart here,
109. 3:52just for the sake of showing you guys
110. 3:53why I view this as liquidity. Look, we
111. 3:55can zoom in on this low. Look at this
112. 3:57whole red box. Look what we did in the
113. 3:58past. Okay, and this is very powerful
114. 4:00here. We induce buyers.
115. 4:03Price has a bearish pullback.
116. 4:06And since we have induced buyers by
117. 4:07taking out these highs, these highs
118. 4:08here, look, buyers have entered here.
119. 4:10And what did price do? We moved to the
120. 4:12upside. So, we have induced buyers, but
121. 4:15we still respected the low. What does
122. 4:16that tell us? We have left liquidity
123. 4:19below this low.
124. 4:20You guys know, if you're not new here,
125. 4:22that this is going to be a future target
126. 4:24for me, down here at 24 528.
127. 4:27If we go back to current price action,
128. 4:29again, right now we're trading at London
129. 4:30open. You guys all know me that I only
130. 4:32trade futures at New York in New York
131. 4:35session. It could be sometimes around
132. 4:378:00 a.m. Some Most of the time it's
133. 4:38after stock open, but mainly it's always
134. 4:41in
135. 4:42uh New York session. So, again, London
136. 4:43open, we're selling off to the downside.
137. 4:44If we fast forward price a bit,
138. 4:47let's digest everything that's just
139. 4:48occurred throughout London session here.
140. 4:50So, we tap into this red box, otherwise
141. 4:53known as liquidity from the left-hand
142. 4:54side over here. And look what we start
143. 4:57getting to the upside, a bullish move
144. 4:59up. So, we take out this high. What does
145. 5:01that do? Induces buyers, meaning any
146. 5:04pullbacks,
147. 5:05which we didn't really get, but if we
148. 5:06did get any pullbacks and respected the
149. 5:08low, that was going to be a point buyers
150. 5:10were entering. Now, we continue moving
151. 5:12to the upside and let's put a vertical
152. 5:14line here right at stock open, so we can
153. 5:15identify right here, 9:30, perfect. And
154. 5:18if I continue with price, we're heading
155. 5:19into New York open. Look what we do
156. 5:21here, very important. Okay, so this goes
157. 5:23again to focusing on
158. 5:26the intention behind all these moves.
159. 5:27We've just taken out another high. Taken
160. 5:29another high, and when we do, you have
161. 5:30to ask yourself, what is the purpose of
162. 5:32that? We have now induced buyers. Not
163. 5:35only have we induced buyers, but yes,
164. 5:37we're starting to trap sellers. However,
165. 5:39we're not pattern traders, and this is
166. 5:40very important. Just because we took out
167. 5:43this high, does not mean immediately we
168. 5:44have to look for sales back to the
169. 5:45downside. No, that's called patterns and
170. 5:48we're not trading patterns, we're
171. 5:49looking for logic. Look what we marked
172. 5:51out right ahead.
173. 5:5224 982. I'm interested in price above it
174. 5:56because when price does stab this high
175. 5:58out, that tells me we have taken out any
176. 6:01early sellers. And if you guys remember,
177. 6:03if I'm looking for sell positions in the
178. 6:05market, what do we need to see occur
179. 6:07before taking that sell?
180. 6:09We need to wait for sellers to be
181. 6:10trapped, right? Early sellers get taken
182. 6:12out of the market. That's the theory
183. 6:13behind the whole strategy. In order for
184. 6:15me to sell, I need to see sellers
185. 6:17trapped. What do we have right here? An
186. 6:18obvious level of liquidity, I should
187. 6:20say. Okay, so again, as soon as price
188. 6:23stabs out this high, then I'm interested
189. 6:25in selling and of course I want to look
190. 6:27to target any liquidity to the downside.
191. 6:29What did we leave to the downside? These
192. 6:31lows here, right? You see how
193. 6:32everything's piecing together. And we're
194. 6:34we're looking at this and we're
195. 6:35identifying all this before we've run
196. 6:37any sort of highs. So we're ready,
197. 6:39right? If the price does take out this
198. 6:41high, we can anticipate a possible sell
199. 6:43entry and then look to target all these
200. 6:45levels to the downside. Okay, so let's
201. 6:47digest everything that's going on post
202. 6:49stock open.
203. 6:51So we get a little bit of choppy PA
204. 6:53right at stock open and then if we open
205. 6:55this up on the 5-minute chart, let's get
206. 6:56rid of the vertical line now.
207. 6:58What happened right at stock open here?
208. 7:00So at 9:30 exactly, we get a sell-off to
209. 7:04the downside. Look how we clear all of
210. 7:06these lows here. The intention behind
211. 7:08this sell-off is what? Let's mark it
212. 7:10out.
213. 7:11As soon as we stab out all these lows,
214. 7:13understand that we are inducing sellers
215. 7:15here. Meaning, sellers induce
216. 7:18right at this level here. Now that we've
217. 7:19done that,
218. 7:21you have to understand that this
219. 7:23sell-off to the downside, especially at
220. 7:25stock open, will induce early sellers.
221. 7:26Meaning, there's going to be liquidity
222. 7:28above this high, this high and overall
223. 7:31this high up here. The intention behind
224. 7:34this move right at stock open, I'm going
225. 7:35to circle it for us, high to low.
226. 7:39This is setting up in our favor.
227. 7:41We get a sell-off to the downside with
228. 7:43decent momentum off stock open inducing
229. 7:45all the early sellers. And you guys
230. 7:46already know in order for me to take an
231. 7:48entry, I need to see those early sellers
232. 7:50induced. And of course,
233. 7:52the last piece of the puzzle was see
234. 7:54them get trapped. And then, we look for
235. 7:57our entry. So again, we get that false
236. 7:59move down, sellers are induced, very
237. 8:01important. Now, where is the liquidity
238. 8:02you ask yourself? Where are sellers in
239. 8:04from? Of course, we're in from all the
240. 8:06way up at the high, but look to the
241. 8:07left. And look at what we are running
242. 8:09right now. We are stabbing that high.
243. 8:11So, as soon as we ran that high, I'll go
244. 8:13back to the 5-minute chart just so we
245. 8:14can understand what's going on here.
246. 8:16As soon as we stab out this high,
247. 8:18entries are taken just like this, okay?
248. 8:22And I don't need to get greedy. I don't
249. 8:23need the top of the imbalance or the
250. 8:24very extreme, the very top, no. I just
251. 8:27want to enter as soon as that liquidity
252. 8:28is taken. So, I've identified sellers
253. 8:29getting trapped here. My stop loss is
254. 8:31going to go above my liquidity block to
255. 8:33the left-hand side just like this. And I
256. 8:35have multiple targets to the downside.
257. 8:37So, let's remove some of these drawings
258. 8:38here. Okay, so I remove some of these
259. 8:40drawings. Let's leave these ones on cuz
260. 8:41they are very important for sure
261. 8:42inducing sellers here. And then of
262. 8:44course, once stabbing out the high, we
263. 8:45have trapped them. And now again, our
264. 8:47entry point. Target-wise, we have an
265. 8:50easy level of internal liquidity left
266. 8:52here, right? We can all agree if I zoom
267. 8:54in, we have left liquidity to the
268. 8:55downside here, perfect. And if I
269. 8:57continuously follow price to the to the
270. 8:59left-hand side, look what we've done
271. 9:00here. Left another level of internal
272. 9:01liquidity. So, these are levels that you
273. 9:03can either manage your trade or close or
274. 9:07partial. You guys have heard me talk
275. 9:08about this in previous videos, but this
276. 9:10again, it it comes down to you and your
277. 9:12comfortability. If you guys like to
278. 9:14target a 1:3, a 1:4, and it matches up
279. 9:16with a target, perfect. That's all you
280. 9:18need. However, I understand that I like
281. 9:20to hold to more further targets. So
282. 9:22again, I have an idea of price running
283. 9:24all the way back down to this low. And
284. 9:26eventually,
285. 9:27we have the low to the left-hand side.
286. 9:29So, this could be a gorgeous full target
287. 9:31down here. But of course, you have to
288. 9:33understand, and I want you guys to
289. 9:35understand this, that these levels of
290. 9:37liquidity I've just identified all these
291. 9:38black lines here, these horizontal rays.
292. 9:41These are all levels of internal
293. 9:43liquidity, aka price can have pullbacks,
294. 9:45bullish pullbacks after taking them out.
295. 9:46So, if I can just draw this out and make
296. 9:48sense of that for you, maybe this
297. 9:50happens, right? And we go lower, maybe
298. 9:52that happens, right? This is what you
299. 9:54guys need to understand.
300. 9:55These things can occur. So, the thing is
301. 9:57you want to identify these levels
302. 9:59because you could have partialed here.
303. 10:00You could have partialed here. You could
304. 10:02have partialed here, right? And then the
305. 10:03pullback doesn't phase you. See what I
306. 10:05mean? Let's understand the whole big
307. 10:07picture here. Remember what we did at
308. 10:09this point, after taking out this level
309. 10:12here. I'm going to circle it for
310. 10:13everybody here. Buyers are induced,
311. 10:15meaning any bullish reactions in these
312. 10:18levels, any bullish reactions, deem them
313. 10:20to be false and they should be a trap
314. 10:22because we've just induced buyers and
315. 10:24trapped sellers. So, that means there's
316. 10:26going to be buyer liquidity left in the
317. 10:28market and no more sellers. So, now we
318. 10:31want to take advantage of this move
319. 10:32right now, okay? So, entry,
320. 10:34stop loss, target all the way to the
321. 10:36downside. Let's play price out a little
322. 10:38bit.
323. 10:39And you get a sharp move here, a little
324. 10:41pullback, and now we're starting to run
325. 10:42on these internal lows. So, now at this
326. 10:43point, I'm definitely rolling my stop to
327. 10:46above the reaction high or you could be
328. 10:49going BE, right? This is again, this is
329. 10:51a completely up to you. I leave that
330. 10:52option for you. And we continue selling
331. 10:55off. We take this level of internal, big
332. 10:57surprise, we get a pullback. And then we
333. 10:58continue, and finally we have this low
334. 11:01taken. This is definitely a structural
335. 11:02level, so you always want to be paying
336. 11:04yourself at these levels. And then your
337. 11:06full target would have been all the way
338. 11:07down at the low. I don't know if we met
339. 11:08it the same day or maybe later on in the
340. 11:10day. Let's take a look.
341. 11:12And we did. So, the full target's also
342. 11:14hit. And look at that gorgeous move. So,
343. 11:16we get that trap move up to induce the
344. 11:17buyers, and then we get that move, the
345. 11:19actual move back down to get rid of all
346. 11:21the buyers in the market. So, sellers
347. 11:23trapped, hunting all the buyer
348. 11:24liquidity. And I actually took this
349. 11:26trade, we'll pop it up for you guys, and
350. 11:28I passed $500,000
351. 11:30in challenges, acquiring me 500k in
352. 11:33funding with Apex. So,
353. 11:35one trade passed all five accounts. It
354. 11:37was wonderful. It was clean. Super,
355. 11:39super clean. Ended up taking this with
356. 11:40the community as well. But yeah, these
357. 11:41are the kind of setups you want to be
358. 11:42looking for in the market, man. Very,
359. 11:44very clean setup overall. All right,
360. 11:46guys. If you enjoyed today's video,
361. 11:48please leave a like and a comment. Those
362. 11:50likes, let's run them up. I want to
363. 11:51start seeing maybe 1,500, 2K likes per
364. 11:54video. That would be fire. If you guys
365. 11:56enjoyed this one and want to see more,
366. 11:58of course, let us know in the comments
367. 11:59down below. We'll see you in future
368. 12:00videos.