Ryan's Twitter Thread

WHAT EXACTLY IS LIQUIDITY? Why is it so important — and how do traders use it to their advantage? How can understanding liquidity levels give you cleaner entries and more confident trades? It’s actually much simpler than most think. A thread for beginners 🧵

When a trader wants to go long, they typically place their stop-loss below a swing low Conversely, short traders place stops above a swing high These stop orders create pools of liquidity sell stops below lows and buy stops above highs

For a reversal to occur, there must be willing buyers or sellers: traders ready to buy high or sell low Smart money seeks to pair their orders with this liquidity, targeting these swing points to enter large positions efficiently

That’s why price often reverses right after sweeping liquidity

Before entering any setup, you should wait for a liquidity sweep. Letting price take out a key high or low first significantly increases your win rate, as it signals where smart money is active Otherwise, you risk price sweeping your entry as liquidity and stopping you out

I hope you found this thread insightful! If you’d like to see more content like this, leave a LIKE and COMMENT below.🔗 For more insights and updates, check out my other platforms! My YouTube has a free bootcamp to learn more of this (go to my playlists section)