Disliked{quote} I will be working on the Gap Fill blog post tomorrow. In the meantime - I have some questions. There are no right or wrong answers - I just want you to think about them and respond. 1. What do you think a Liquidity Gap is? 2. Why do you think a Liquidity Gap should be filled? 3. How do you know if a Liquidity Gap will cause a continuation or reversal? 4. How does sentiment play a role in the Liquidity Gap Trade? Those who participate will get rewarded with a link to my thorough analysis and explanation of the trade as soon as it is complete....Ignored
I use Liquidity Gaps to trade all night long, here is how I see it and with NO losing trading days for 3 months, trading Liquidity Gaps work.
1.. Its worth looking first on how a Liquidity Gap is created and why. It is the speed of the Algo driving the market. When the Algo reaches our to clear Pools of Liquidity, this manic movement fractures the market creating micro gaps.
This causes an inbalance to the market structure which are filled 90% of the time.
The Algo always fills SIDE A seen in a long ranging candle and often SIDE B provided News isn't the reason for the move.
2.. Gaps create an inbalance to the market which are both unfilled orders and SPACE. Space is good for the Algo because it can move the price onto other Liquidity pools with no effort. They are created on purpose by the Algo.
3.. For a Reversal, we look for two conditions. A- No interlocking of M1 Candles before a spike B- Visible Gaps between candles with no or little wicks.
4.. Sentiment is just herd behaviour which the Algo is coded to encourage traders to place trades and stop losses into groups or clusters of Liquidity.
This is my opinion based on real life trading results.
Trading thin liquidity at the boundary of the charts
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