Liquidity Pool

A liquidity pool is a localized cluster of stop orders sitting beyond a specific high or low. In practice it is a single, pinpoint target of a move: the market heads for a swing not for the level itself but for the orders banked behind it. The longer the level held and the more traders placed stops beyond it, the denser the pool.

Pools shape the logic of price's path. Above equal highs and below equal lows they are especially pronounced, because matching levels attract stops predictably. Price first reaches for the large external pools, then returns to internal ones to redistribute orders before the next impulse.

In FocusProfit's markup, liquidity pools are tied to the boundaries of the 4H trading range: external pools define the targets, internal pools mark the reaction points inside the range. By seeing where the nearest untaken pool lies, a trader knows where the market still has unfinished business.