They Lied About Liquidity... Here's the TRUTH

This trading indicator literally feels illegal because of the amount of precision and quality of data it delivers. This is an order flow heat map by DeepCharts. It's called Deep Dom. And it basically shows you the real areas of liquidity around the chart and how the market is interacting with that liquidity. Because this is how they will explain liquidity in the retail trading space. They will say above a high there is stop losses. So the people who sold have, have a buy stop above the high. So the market makers will push the price up there just to trigger their stop loss, make them lose money so that they can fuel somehow the next move. And that is a very hilarious predicament. Not only because of the fact that retail traders are a very small percentage of the market, less than 5%, especially in the huge markets such as Forex and S and P and NASDAQ and these big, big super liquid assets where they mostly trade CFDs or prop firm accounts, which are not even real accounts, so they're not really in the market. So we all know that that's a very hilarious predicament. But with tools like these ones, you can really understand what is really going on inside of the market. Because let's say price went up and then down, and we're at this point, there will always be a low and there will always be a high somewhere. Price cannot stay in the same range forever. So at some point it's going to take a high or it's going to take a low, at some point it always happens. Highs and lows are made to be taken, otherwise price will always stay in this range. And, and so you'll see a lot of these influencers saying, see, it went above the high, I told you, well, duh, it's always going to highs and lows. And you can see it in a situation like this, right, where they took the high, then there was a low, they took the low, then they took again the high, then they took the lows, then again they took the highs, then again they took the lows, and then again they took the highs, and then again they took the lows. And guess what happens next? They took the high again, they took the low again, and they took the high again. But if this was true, and we define liquidity as resting orders, well, if that liquidity is taken, it means that it's executed. And if it's executed, we can track it through volume. And if you track a volume profile, which is the display of executed liquidity, you will see that in these areas where liquidity is supposed to be grabbed. Those are the areas with the lowest amount of volume. So there was not a lot of liquidity there. And here's also another thing that people don't know. There is no way other than with access to privilege privileged information to see where the stops are. And in regulated exchanges you simply cannot see it. Maybe CFD prop firms and brokers will requote prices to spike you out. That's something that happens with brokers that have an actual interest in stopping you out. Retail traders are not the liquidity of banks. Banks have bigger problems to think of, but they are the liquidity of prop firms. They're liquidity of brokers, that's for sure. So how do we read and use tools like this one to have a good accuracy at anticipating where price is going to go next? Well, before we can understand it, we need to understand what this type of chart is. And it's actually very simple. Up here you have sell orders. So these are all sell limit, resting liquidity above the current price, below the current price, you have buy limits, buy liquidity. And you should see these, like the paintings in an auction, they're just offered there, waiting for someone to either buy or sell at a higher or lower price. And if I zoom in, I can actually see, I can see that this level where there's 45 cents sell contracts, at some point a buyer will come, you see this big green bubble, this big blue bubble and they will eat those 40 contracts. So you have some passive liquidity which is these sell orders and then aggressive buyers that are the counterpart to that someone simply clicking the buy market button. And what a lot of people don't know is that if for example, there's stops above here, they will come into the market as these green bubbles. And same thing here. If below here there are stops, they will enter in the form of these purple or these pink bubbles. And as you can see, yes, there it is, right? And they will eat the liquidity that is present from the buy side. And this heat map can show you the areas with the highest level of liquidity. And yes, markets are driven towards liquidity. And the reason that is is because the market participants that actually have a lot of money to move the markets, they want to do it at an efficient price level. So they will seek for liquidity. That is actually true. But the liquidity they can be somewhat sure that they can be looking for is limit liquidity, not stop liquidity. And as you'll see often in any session in the stock market is that these areas of liquidity will be used as targets. And especially when there's more of these in a row, they will tend to eat all of them. Eat all of them. Because let's say they want to sell 1000 contracts in this session. Well, here they have all of this big list of buyers. And so they can sell to these guys. They can sell to these guys, to these guys. So they will naturally be driven towards these areas. And let's see what price did exactly yesterday from all the way up here, we went down to the first liquidity level. And look at what happened. As soon as we got close to this huge liquidity areas, this thing, this huge thing came into the market. A huge market order that swept away the buy limits. Not the sell stops, the buy limits. And yes, this happened below this low. Below this low. But this boy ain't retail traders. We're talking about thousands of contracts. And after this happened, as you can see, we went to the next liquidity level and then to the next liquidity level and to the next liquidity level, and then again slowly but surely to the next liquidity level and again to the next liquidity level. And right after we took all of these, some liquidity started forming here on the upper side. And slowly but surely, after they've taken also these levels of liquidity, we go up and take out these levels now on the buy side. And then right where the big order was, that's exactly where price reverses to keep looking for the rest of the liquidity sitting below here. And that's why I say it almost feels illegal, especially if you look at the precision of these levels. If on here I take the exact level at which these big bubbles have started, which is this one, and I draw this line maybe in a red color, you will see that that's exactly where price wasn't able to rise anymore and where the same aggressive sellers that sold there were present here to sell market again and drive the auction lower and lower. And yes, you can see it also with the footprint chart. In the footprint chart, you can actually see that's exactly the same level, right? 33 contracts. And look at the absence of buyers on this side. We got so many aggressive sellers here, but zero buyers aggressively. Why? Because this is all happening so fast. It's just one big market order below this low. So my friends, below lows, there's not just retails, there's some huge, and I mean huge market participants that want to join the party during the breakout. And those are exactly the areas where price will reverse with an accuracy that price action traders simply cannot get. And as soon as it's broken out of that's going to be the area that they will use to reverse. So with these type of tools, we're talking about real support, real resistance, real order flow, real supply and demand. Anything that you would like to see with candlesticks, you can see with a level of precision, quality, realism and rationality and objectivity that almost feels illegal. And just so you know, this software is about to be released, and there's much more to this software than just liquidity areas. But if you want to get your hands on this, click the link down below and join the wait list. Because with deep charts, we are about to release this absolutely phenomenal weapon for traders. See you in the next video.