Support, Resistance & Liquidity: Smart Money Trading Foundation
Learn how price reacts at key levels and how smart money uses liquidity
Support and resistance are not just lines. They are liquidity zones where traders place orders. Smart money targets these areas to create movement.
1. Support Level
- Area where price stops falling
- Buyers enter market
Support acts as a demand zone.
2. Resistance Level
- Area where price stops rising
- Sellers enter market
Resistance acts as a supply zone.
3. Liquidity Concept
- Stop losses exist above highs and below lows
- Market targets these zones
Liquidity is the fuel for market movement.
4. Liquidity Sweep
- Price breaks high/low
- Triggers stop losses
- Reverses direction
Also called stop hunt or fake breakout.
5. Trading Logic
- Do not trade at obvious levels
- Wait for liquidity sweep
- Enter after confirmation
6. Entry Strategy
- Wait for sweep
- Look for rejection candle
- Confirm structure shift
7. Stop Loss
- Below liquidity (buy)
- Above liquidity (sell)
Common Mistakes
- Buying at resistance
- Selling at support
- Ignoring liquidity traps
Final Insight
The market does not respect levels. It hunts liquidity around them.
Shaktimatha Learning
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