01Where the orders are
Above every obvious high sit buy stops: stop-losses from shorts and breakout buy orders. That is buy-side liquidity (BSL). Below every obvious low sit sell stops — sell-side liquidity (SSL). When those stops trigger, they become market orders: exactly what a large seller needs above a high, or a large buyer needs below a low.
02Ranking liquidity pools
| Pool | Why it attracts price |
|---|---|
| Equal highs / equal lows | Textbook “double top/bottom” stops stacked at one price |
| Previous day high/low (PDH/PDL) | Watched by every intraday trader |
| Previous week / month high-low | Higher-timeframe stops and options positioning |
| Session highs/lows (Asia, London) | Raided during the next session’s killzone |
| Trendline liquidity | Stops placed under “obvious” trendlines |
| Round numbers | Psychological stops and option strikes |
At any moment, ask: “Which pool is price most likely to reach next?” In a bullish structure the draw is usually the buy-side above; in a bearish structure, the sell-side below. That single question gives every trade a logical target.
03Liquidity is fuel, not a signal
A pool tells you where price is likely to travel, not when. Many traders lose money trying to fade the first touch of equal highs. The edge appears after the pool is taken — when price shows it was a raid, not a breakout. That is the next lesson.
- BSL = buy stops above highs; SSL = sell stops below lows.
- Equal highs/lows and PDH/PDL are prime pools.
- The draw on liquidity frames direction and targets.
- Pools are targets and fuel — wait for the reaction.
- Putting your own stop exactly at the obvious equal low
- Fading the first touch of a pool
- Ignoring higher-timeframe pools that dwarf the intraday ones
Complete “Market Structure: BOS vs CHoCH” to unlock this challenge.