Let's Talk Liquidity! ⚒️

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At first, Liquidity may seem like an abstract and confusing concept reserved for only those Finance nerds and geeks to tackle. Turns out it's really not too sophisticated after all and can be though of in terms of Fomo. Fomo if you are not aware already is simply a concept related to chasing the market because of a Fear of missing out. Any action out of fear is typically not the best choice. In trading, this is especially true.
Liquidity is what the market needs prior to a big move. Liquidity doesn't necessarily mean that the market needs to pin an extreme low or high from the previous session. Liquidity is also gathered when the market ranges/consolidates for awhile. If you go back and backtest, you will observe that preceding a large move, the market usually consolidates first. Liquidity also dries up during Asian session. You can observe that the volatility is much smaller than London/Ny session as the market moves alot less # of pips. Liquidity dries up prior to news annoucnemnts becuase of uncertainty obviously. This is the very reason why the market moves so much during news is because of lower participation from larger market participants, therefore an increased chance of wild and random price movements.

This is explained more in depth in this concept video, Let's talk Liquidity.
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Let's Talk Liquidity!
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Liquidity is necessary for market makers to fill their inventory and set the campaign on it's course.
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The way I scalp is buy going against Fomo Liquidity
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Liquidity !
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Liquidity is necessary for the market before making a big move. I had to learn this the hard way.
educacioneducationeducationalposteurodollarEURUSDeurusdoutlookForexFundamental AnalysisliquiditypriceactionSupply and DemandTrend Analysis

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