Learn ICT Concepts in 20 Minutes (Liquidity Sweeps& Order Blocks)

Summary

Key Points

• Buy-side liquidity sweeps occur when the market trades above a previous high to trigger buy stop orders and attract breakout buyers before reversing lower, utilizing the liquidity pool above the high. 1:09
• Sell-side liquidity sweeps happen when the market trades below a previous low to trigger sell stop orders and attract breakout sellers before reversing higher, using the liquidity pool below the low. 3:04
• External liquidity sweeps, both bullish and bearish, occur at the boundaries of a range, where the market sweeps liquidity on one side before moving towards the opposite side. 5:40
• Internal liquidity sweeps happen within a trend during pullbacks, where the market briefly trades against the trend to collect liquidity before continuing in the original direction. 8:22
• A break of structure (BOS) signifies the continuation of a trend when price creates a new swing high in an uptrend or a new swing low in a downtrend. 10:32
• A change of character (CHOCH) is the first indication that a trend might be reversing, occurring when price breaks the previous swing low in an uptrend or the previous swing high in a downtrend. 11:29
• Trading order blocks involves waiting for price to retrace into the zone, observing for confirmation of institutional defense (like a pin bar), and aligning with higher time frame market structure. 16:21
• FVGs can be used in conjunction with market structure and Fibonacci retracements (specifically the 50% or 61.8% levels, known as golden FVGs) to identify high-probability trading opportunities. 16:30
• Fair value gaps (FVGs) are imbalances created by aggressive price movements in one direction, representing areas where price may revisit to rebalance before continuing its move. 17:15
• Order blocks are identified as the last candle before an impulsive move that created an imbalance, representing areas where institutional orders may have been placed and where price might react. 17:18