[0:00]What's going on guys? Welcome back to another inter equity trading video. Today, we're going to be continuing on with this series, liquidity inducements. This is when things start getting interesting and maybe a little bit complex, so please bear with me. Rewatch this video as much as needed because I start going really in depth with liquidity and inducements. So when things start getting a little bit confusing, if you need to rewatch it, please go back and rewatch it, okay? Take your time watching these videos. If you guys enjoy these, please leave a like and a comment down below. Let us know what videos you guys want to see next going forward, subscribe if you guys have not yet already. We have a lot more videos coming your way.
[0:38]All right guys, so we're going to head back to the diagrams again. We need these diagrams for you guys to understand the foundation behind liquidity and inducements. This diagram here is going to get actually quite complex and we're going to have a lot of annotations on the screen. So please follow along accordingly and rewind if you have to. If you need to rewatch the video, that's no problem at all. We're going to start with some simple stuff here.
[1:01]What do we have in front of us? Simple stuff as you guys already know, low taking out, which means sellers induced. The market comes back to the high, which tells us sellers are entering here, and again, we move to the downside. Pushing to new lows, taking out previous lows. So, what do we have in front of us right now? We have a point of liquidity at the highs. Why is this liquidity? Very simple stuff. High, respected high, and we move to the downside. Okay, we should all know this by now. So we're simply going to grab that high and drag it over. No problem. Following this big sell off to the downside, we get a push higher printing a high, a low, and finally a new high in the market. Now what do we have in front of us? Since we have taken out new lows, we'll simply right here sellers induced. After that, price prints low, high, low, and new high taking out previous highs. So that will mean buyers are induced here. Very simple. Following that, check this out, this is where people start getting tricked. The market gives us a low and a new high. So this is where people start making some mistakes. Let's mark this on. Price taking out a new high, which tells us what same thing. Buyers are induced, so we can mark that on here. And that also tells us if price comes down to this region down here, down to this low, this is where retail wants to buy from, right? And of course, they want to see that continuation higher. However, we do not trade like that. We want to see buyers trapped. Okay, so what tends to happen is the market will come down to the low, give us a little bit of a false reaction higher, okay, but overall push lower. This is what we want to see. Now, let's continue following along with the annotations here. Let's mark out this low, and again, sellers induced. Of course, very easy. Why sellers induced? Since we've taken out this low, sellers viewed this as a break of market structure to the downside, and they want to be pushing price lower, okay? We understand that, so that means sellers are induced. However, now there's a new thing, buyers are also trapped. Why are buyers trapped? Well, since buyers were entering positions here, and they give a false reaction higher, as soon as the market takes out the lows, buyers have been trapped. So again, sellers induced, buyers trapped, perfect. Now, look what the market does here. And this is where people start making a lot of mistakes. We get a sharp reaction to the upside, taking out this high we have right here. Why is this important? Since we have taken out that high, buyers are induced and sellers are trapped. Now, why are sellers trapped? Well, since the market has taken out this low, this is the same thing over and over. This high here was a trap. They are going to be selling below that high, but since that high is now got taken out, sellers are now trapped. And what happens right after that? We get a quick move down to the downside. All right. Now, this move here, this is where a lot of people make that mistake. Since price has taken out this high here, how many of you guys are trying to buy this low? Expecting price to go higher. No, that's not how the market operates here. The market will always hunt for that liquidity, and since we have induced buyers by taking out this high, that tells me buyer liquidity down at the low. So look, the market comes down and traps people at the low. So now, let's annotate this. Buyers trapped and sellers induced. Perfect. What does that tell us? Trap. The market starts going long. And check this out. We get high, low, new high, low, buyers entering positions in here. Same thing over and over. And then we push to new highs. We come into an area that sellers want to see price at, okay? Sellers want to see a sell off to the downside here. However, remember what's happened. We've taken out this low, sellers induced. Buyers trapped, which means we want to be participating in buys. How do we involve ourselves in buys? This is where everybody makes that mistake. We need to see liquidity taken to the downside, and look what we've done here. We've taken out a high and respected the low. So, simple stuff, that's that's a form of liquidity for us. We're going to grab that low and drag it over to the right. Now, remember what we need to expect at the highs. This is going to be an area that sellers want to push price away. This is going to be an area that sellers will be getting trapped from, okay? So, what tends to happen is the market will give that false reaction, and they'll even come down to the low, give a false reaction, and then finally the trap occurs. Taking out any buyers that were looking to buy this thing above these lows. So as soon as this occurs, this is your signal to buy right here. And our stop loss is always going to be covering the low, right underneath. We need to be covering this little right here. All right. So stop loss covers that low. And now we're going to be targeting all of that liquidity to the upside. All right. So, there's a lot of annotations on the screen right now, 100%. I understand that, but please understand that every single move here had an intention, there was reasoning, there was logic, okay? And the, I would say the most important part to this whole diagram, right here, is understanding this bit. That we have taken out this high, which induces early buyers, okay? Then we get this move from high to low, trapping those buyers. Okay, that's the most important part there. Okay, you guys need to understand that. As soon as that occurs, and we print this low right here, you know where your eyes have to be at. You know where your eyes have to be glued to, right away these highs. So this is where you want to look to start buying, and then of course, here as well. After this buy opportunity is presented, usually we can screw around for a bit, and then finally you'll get that move all the way to the upside. So again, there's a lot of annotations on the screen right now, and it might look very noisy. However, please rewatch this video as much as needed. There is gems on gems on gems, a lot of value in here, guys. All right, I hope you enjoyed today's video. Now, going forward, we're going to start diving into some charts, but again, I wanted to do these first couple videos, these first couple episodes on diagrams to make sure you guys understand the foundation of all this stuff. Right, if you guys enjoyed the video, please leave that like, leave a comment down below. We'll see you guys soon, take care.
