Liquidity Runs

Liquidity (formally): the degree to which an asset can be quickly bought or sold without dramatically affecting its price. In ICT terms it's simpler: buy orders and sell orders.

The Story of the Stops

A short taken at a swing high is profitable as price falls — its buy stop rests just above that high (often right at it). A long from a low has its sell stop below the low. The market tends to find an interest in going back to where that large body of interest rests. So we're not looking for patterns for the sake of patterns — we're looking at where existing orders reside: liquidity above old highs, liquidity below old lows. It's just that simple, and it removes the retail, indicator-leaning perspective entirely — no bias relative to anything except price itself.

High Resistance — Why You Avoid It

• To run an old high, price must fight through every old low (standard resistance) and every intermediate high on the way — those stops are highly defended.
• Generally only a sharp injection of volatility — non-farm payroll, FOMC, a black swan — cuts through that kind of price action.
• This is the element of price action to trade least frequently.

Low Resistance — The Easiest Trading There Is

• After a sharp one-way decline breaks an old low, the run back up through the short-term highs created on the way down is low resistance — buy stops sit above every one of them, and each retracement sets up the next drive through.
• The low-resistance zone is defined from the broken low back up to where the drop began. Once price returns to the level of the old broken low, the probabilities fall off precipitously — it becomes a high resistance run for anything beyond it.
• Reverse it for the sell side: consolidation → expansion up breaking a short-term high → the fall back down through that one-sided run is low resistance, with sell-stop liquidity below every short-term low (and bottom-chasers building it up).