Market liquidity is greatly influenced by the collective sentiment and behavioral patterns of retail investors.
To accurately identify high-quality liquidity targets, we must first understand the two fundamental components of retail trading decisions:
🔹Identifiable trading patterns
🔹Overwhelming trading sentiment
The former provides retail investors with a 'position' to trade, while the latter offers a 'reason' to take action.
High-quality, accessible liquidity only forms when clear trading patterns combine with strong sentiment.
This article aims to analyze these two fundamental components; this is not the entirety of the core of a trading system, so please do not overinterpret or impose it excessively. More content will be shared gradually later.
Below is an analytical framework that combines High Time Frame (HTF) and Low Time Frame (LTF) to identify and target high-quality liquidity opportunities created by retail behavior.
High Time Frame ⬇️
Low Time Frame ⬇️
Difference between High-Quality Liquidity and Low-Quality Liquidity ⬇️
