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4. Liquidity_and_Manipulation.pdf - Liquidity and...

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Liquidity and Manipulation1Liquidity and ManipulationCreatedTagsThe markets need to generate liquidity in order to move, so if liquidity isn´talready there, it will be created. So when new traders come in to forex andlearn about it for the first time, what they usually do is gonna be retail basedtrading.So support and resistance, chart patterns which are extremely popular in theindustry, and things of that nature.So what some brokers do is they offer free education for their clients once westart trading. Now this education will usually be retail methods support andresistance.So why is this?Well its simple, they want to generate liquidity into the markets, because themajority of traders are trading this way. So these retail methods are notunknown to large banks, and people with large interests. Of course they are notall this information is out there for free, for anyone to go and we know seachup.So if all this information is available for free don´t think its wise to assume thatthese people with huge amounts of money, they are going to use it against themajority of retail traders in order to manipulate the markets.So when we dig deep into chart patterns like the double top, double bottom orbull flag, bear flag, which we know retail traders absolutely love this patterns.We need to understand they are all manipulated and they only they do workbut only when we really know what we are doing, and how we can trade aroundthe manipulation, because there is a few people who talk about mathpsychology and as long as we know whats going on and the math psychologybehind this patterns, we can still trade them definitely.So what trade is a tool is to sell at double tops, or buy at double bottoms.July 17, 2021 146 AM
Liquidity and Manipulation2If we know this and large banks know this, what does thatreally mean?Well its means that theres is a lot of liquidity above or below this areas. Sothere is a lot of luquidity above we know a double top or triple top, quadruple,whatever. And there is liquidity below double bottoms.So that is why we know double tops as EQHs and double bottoms as EQLs. Weexpect price to be manipulated at and around this areas.All we need to do is go back and look at the data, because its all there. So oncewe see large moves up, sell size liquidity will usually need to be swept orgenerated beforehand. That allow that move to actually we know impulsivelymove.Its basically fueled the move.The same goes for when we large down moves by side liquidity will usuallyneed to swept or taken out prior.So now we have gone through that, what we wanna go through is this littlepattern, and what we can see from this pattern is price was pushing up, whichlooks like and ascending channel, price then we had this high, we pushed
Liquidity and Manipulation3down, pulled back, pushed down, showing a little bit of a slow down in this

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