Kardec TraderFutures Trader. Creator of The Midas Touch. Mentor

The TRUTH About Liquidity (MUST WATCH)🚨

18 Feb 2026 · 0 min

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In this segment of Kardec Trader's YouTube video, the hosts discuss the definition of market liquidity. They describe liquidity primarily as the pool of resting orders—specifically stop orders and stop‑loss placements—waiting in the order book. By recognizing where traders tend to enter positions at market highs or lows, a trader can infer where this resting liquidity is concentrated. The conversation frames liquidity as a tangible, observable element rather than an abstract concept, setting the stage for later analysis of how to locate and exploit these zones.

How would you go about defining liquidity?
In my opinion, liquidity is just resting orders in the market. Let's just say stop orders. The best example for myself, what I use the most would just again be stop losses. So if I understand certain traders are entering at a high or a low, then I'll understand that there's going to be resting liquidity there.
So it's essentially just understanding where those orders sit in the market.
Yeah, exactly. If I can just give you another one right here. Quick, simple things like on the uptrend. So since price takes out this high over here, this now tells me the intention behind this move from A to B is now induced buyers into the market. Meaning they may think there's momentum. Right. Or they, they're going to mark this as taking a previous high as like a BOS in the market. Price returns back to this area, the extreme, however they want to look at as support, Fibonacci, even smart money concepts, they're going to want to buy down here. And once the market moves away, simple things again. Now I know there's liquidity below this low.