External and Internal Liquidity

External and internal liquidity are the two tiers where pools of stop orders concentrate. External liquidity sits beyond the large, obvious swings — the boundaries of the range — and acts as the primary target of a move. Internal liquidity lives in the smaller swings inside the range and serves as the reaction points the market works with after the external pool has been taken.

Price constantly shuttles between these tiers: it first reaches for an external pool beyond the range, sweeps it, then returns inside to redistribute orders at internal liquidity before the next impulse. Understanding this route answers where price is headed and where it still has unfinished work.

In the FocusProfit method, this split is the framework for reading the 4H range. It is not known in advance which internal liquidity the market will continue from, so we do not guess — we analyze structure and wait for confirmation. The Trade Model indicator marks ranges and swings, helping separate external target pools from internal reaction points.