✔️ The FOREX market is a zero sum game, which means that for a trader/institution to buy/sell 1 currency pair it's necessary that there is another trader/institution with an opposite position. If Smart Money (Banks) want to buy a currency pair they will need sellers in the market, the existing facility to place these positions In the market is called LIQUIDITY.
✔️ The Liquidity is defined by Stop losses, where the Stop losses exist is where the liquidity also exists, Smart Money need to activate the stop losses of existing orders in the market so that they can place their positions in the market.
✔️ In the FOREX market there are two types of liquidity, which are: 1. Buy Stops Liquidity ( BSL ) - The BSL is originated by Stop Losses of sell orders, after the BSL is taken, the market reverses to the downside, because banks use the BSL to place sell orders in the market. 2. Sell Stops Liquidity ( SSL ) - The SSL is originated by Stop Losses of Buy orders, after the SSL is taken, the market reverses to the Upside, because banks use the SSL to place Buy orders in the market.
✔️ PMH & PML - Previous Month High & Low PWH & PWL - Previous Week High & Low PDH & PDL - Previous Day High & Low HOD & LOD - High Of Day & Low Of Day OLD HIGH & Low - Swing High & Low EQUAL HIGHS & LOWS = Retail Resistance & Support
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