Liquidity Part 3

Liquidity Part 3Lesson 3 of 74 min read

A magnet not a signal

A pool of orders pulls price towards it, which makes it a destination. A destination is not a reason to trade.

Once you can pick the prominent levels, the next question is what to do with them. The answer starts with what they are.

The level pulls price towards it

A pool, meaning orders grouped at one price, behaves like a magnet. Price is drawn to it.

Figure 1 · Gold turning down twice at 2,431, falling to 2,396, then travelling all the way back up into 2,431

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