Kardec Trader explains a liquidity-focused trading rule: wait for price to take out recent lows, then enter buys on the retrace when sellers appear above the highs. This Smart Money Concept approach requires patience for the liquidity-takeout pattern before you take any position.
I have to make sure I'm always targeting liquidity and taking an entry after liquidity is taken. I will never look to take longs above the lows, only below. In this example here, if now I want to look to take buys back up, I will have to look for buys below these lows. Now what we were talking about before is sometimes smart money, concept or structure traders will look at this as like a boss. Now the market, what tends to happen is as we trade back up to the upside, it'll create some sort of internal lows and finally when we approach these areas again. Exactly. So I understand that since we have taken out these lows, 1, 2, 3, retail looks at that as a momentum shift. They're looking to sell up here. So I understand that the market tends to come up and respect these areas again to induce sellers to build liquidity above these highs. If the reaction comes around. Perfect. I'm looking to take a buy entry right here and then all the way back up into the highs.
