Spotting liquidity pools before price reaches them
· Duc Le
Liquidity pools are clusters of resting orders — stop losses and pending entries — that sit above obvious highs or below obvious lows. Price frequently travels to these pools before reversing or accelerating. The skill is marking them before the sweep, not explaining them afterward.
Identify the obvious reference points
Start with swing highs and lows that are visible on the timeframe you trade and one timeframe above. Equal highs and equal lows draw the most resting orders because they are where the largest number of traders place stops. Mark these first.
Inside consolidation ranges, also note the range high and range low. Buy-side liquidity typically sits above the range high; sell-side liquidity below the range low. Traders who bought the range expect a breakout upward; those who sold it place stops above the high.
Map the pool, not the exact tick
A liquidity zone is an area, not a single price line. We typically mark a zone spanning three to eight pips on major FX pairs, depending on volatility. The goal is to anticipate the region where stops cluster, not to predict the precise tick of the sweep.
Validate with recent behavior
Before trusting a marked pool, check whether price has respected similar levels recently. If the last three Asia session highs were swept during London and reversed, a new Asia high is a credible buy-side liquidity target. If sweeps have been failing to reverse, adjust your expectation — the pool may break rather than hold.
Wait for the sweep before acting
Marking liquidity is a planning step, not an entry signal. The sequence we teach: mark the pool, set an alert, observe volume when price enters the zone, then decide whether absorption or continuation is more likely. Entering before the sweep means you are trading into resting orders rather than after they have been cleared.
Our Liquidity Mapping Clinic is a two-hour session devoted to this process. Check the calendar for the next available date.