Glossary
Liquidity
In short
In trading, liquidity often means the orders resting above highs and below lows: stop losses and pending entries. Obvious highs and lows are often run because that is where these orders sit.
Buy-side and sell-side
Above highs rests buy-side liquidity: the buy stops of short sellers and the orders of breakout buyers. Below lows rests sell-side liquidity: the sell stops of buyers and the orders of breakout sellers.
Where the pools are
- Highs and lows of the previous day, week, month and quarter
- Session highs and lows, for example of the Asian session
- Equal highs and equal lows, where many stops sit at the same price
- Clear swing highs and swing lows