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3yed Crypto
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Liquidity induction is a powerful trading strategy rooted in understanding market liquidity and price behavior. In this approach, traders identify areas where liquidity pools—such as stop-loss orders, pending orders, or equal highs/lows—accumulate. These levels often act as traps set by big players like institutions or 'smart money.' The idea is that price is 'induced' to sweep these zones, triggering stops or faking breakouts to grab retail traders' liquidity before the real move begins. For example, imagine a demand zone in EUR/USD with equal lows above it. Price might dip to sweep those lows, collecting liquidity, then reverse into a bullish run. Mastering this method requires spotting liquidity zones, understanding market structure, and anticipating institutional intent—turning the hunters into the hunted.
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