Liquidity

Liquidity is the clusters of pending and stop orders that build up below structural lows and above structural highs. Price gravitates toward them, because a large participant needs opposing orders to fill a position — and the densest pool of opposing orders sits where the protective stops of the crowd are parked. In the FocusProfit method, liquidity is not exchange volume; it is a map of the places where interest concentrates and where the market is most likely to react.

On the chart, liquidity reads through swings — the local highs and lows where price stalled and reversed. Sell-side stops gather above a swing high; buy-side stops sit below a swing low. The higher the timeframe and the stronger the move into the level, the more orders accumulate beneath it. Large, obvious swings form external liquidity; the smaller swings inside a move form internal liquidity.

Reading liquidity makes the chart legible: price moves from one pool of orders to the next, not at random. The Trade Model indicator marks swings and ranges so external and internal liquidity are easier to locate, while the reading itself stays with the trader.