Money Clues Fx Education
This video explains how to combine the Liquidity Swings indicator with price action in order to trade Forex successfully. The Liquidity Swings indicator shows liquidity on a chart, allowing traders to execute trades based on market structure and directional trends. The video details how to add the indicator to your chart and use it to identify bullish and bearish liquidity zones, trade breakouts, and confirm trades. The Liquidity Swings indicator can help traders to identify trends and determine who is in control of the market.
Combining Liquidity Swings Indicator with Price Action: How it can Help You Succeed in Forex Trading
Introduction
Forex trading has always been an attractive venture for traders who are looking to make quick returns and take their financial success to the next level. However, the volatility of the forex market can be overwhelming, especially for new traders who are just starting on their journey. It’s essential to have the right tools, strategies, and analysis to increase the chances of success. In this article, we focus on one such tool, the Liquidity Swings Indicator, and how it can be combined with price action to help you succeed in forex trading.
Understanding Liquidity Swings Indicator
The Liquidity Swings Indicator is a brand new indicator that shows liquidity right on the forex trader’s chart, which is essential for forex trading. The indicator presents a bearish and bullish liquidity zone, indicating a high probability of market movements in either direction. Understanding the indicator is simple; we can equate it to the four-wheels in a car. If the car has no wheels, it cannot move. Similarly, liquidity is the “four-wheels” of the forex market that enables market movements. The higher the liquidity, the higher the movement in the market.
Combining Liquidity Swings Indicator with Price Action
The Liquidity Swings Indicator, when used alone, may not be very effective in making profitable trades. However, when combined with price action, it can vastly increase the chances of making a profitable trade. Liquidity Swings Indicator shows the probability of the market breaking above or below the bearish and bullish liquidity zones, respectively. The indicator also shows us with a dashed line when such possibilities arise, indicating that we should look to trade in the opposite direction to the current trend.
Break of Market Structure
Another technique that we can use in combination with liquidity swings indicator is a “break of market structure.” At a fundamental level, market structure refers to the sequence of highs and lows of price action in the market. The aim is to identify changes in the market structure, indicating a possible trend reversal.
When we combine liquidity swings indicator with a break of market, we can identify market trends and trade accordingly. For example, if we see a bearish liquidity zone, we wait for a break of market structure before executing a sell order. Similarly, when we see a bullish liquidity zone, we wait for the break of the market structure before placing our buy order. This combination helps us identify market trends and make profitable trades.
Trading Liquidity During Consolidation
When the forex market is not exiting a trend, it is said to be consolidating. During consolidation, we observe that the market structure consists of equal highs and lows. In such situations, it is essential to focus on other indicators such as the Relative Strength Index (RSI) to identify possible trends.
Conclusion
In summary, a combination of liquidity swings indicator, price action, and break of market structure can help us identify potential trends and signal possible market movements. We need to have a sound knowledge of these indicators and their application before using them to make profitable trades. Remember, forex trading comes with risks, and it is essential to take measures to minimize losses. A combination of tools used correctly can increase the chances of succeeding in the forex market.
