A short trading lesson (YouTube video) arguing that every profitable trade begins with a clear story built around liquidity. The speaker emphasizes conditional trade rules (if/then confluence), using liquidity catalysts such as highs/lows and frequently-tapped support/resistance to set entries, stops, and targets.
Anytime that you're looking at a chart, you are trying to tell a story. Proficient traders, even if they're day trading and they don't know it yet they are telling a story. They have conditional statements that they're looking for. If this happens and this happens and this happens and I have this confluence, then I enter a trade here with a stop limit that makes sense and a take profit that makes sense. That story consists of, number one, what I call a liquidity catalyst. Liquidity includes everything. It includes old highs and lows, key levels. If you have a support zone that has been tapped multiple times, this is a key area of liquidity. Why? Because you expect there to be quite a few buyers and or sellers at that level. You might be trading a bounce from that level. You might be trading a break and retest of that level. This is a key liquidity level. I don't care what strategy you're using, you were trying to tell a story around liquidity. That is all you're doing.
