Using Liquidity and Chart Patterns to Predict Forex Moves
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📘 Chart Patterns, Liquidity Flow, and Resistance in Forex Trading
In this guide we explore how to use **chart patterns**, **liquidity flow**, and **resistance areas** to enhance Forex trading strategies as defined here.
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# 🧩 Chart Structure and Key Patterns
* **Liquidity Flow (Momentum):**
*Liquidity* here refers to the flow of price momentum. A **liquidity sweep** happens when price breaks through key levels, absorbing transactional activity and creating momentum. This flow often signals shifts in market direction and potential reversals.
* **Gap Closures:**
Price gaps (sudden candlestick jumps) often “fill” as the market returns to untraded areas. Traders watch for these gaps to provide potential targets or reversal points.
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# 🧭 Market Structure and Momentum
* **Equal Highs & Lows:**
Equal lows act as **support**; when breached, they trigger liquidity-driven moves. Equal highs act as **resistance**, where repeated failure to break creates a strong seller presence, often leading to a reversal.
* **Momentum (MOM):**
Sharp momentum moves (labelled as “MOM”) signal potential market shifts. These moves often precede **liquidity sweeps** and can help traders anticipate upcoming price action.
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# 💧 Liquidity and Order Flow
* **Bearish Candle Pressure:**
When price retraces to the **50% midpoint** of a dominant bearish candle, it can act as a resistance zone, where selling pressure resumes and liquidity is absorbed, pushing price lower.
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#🔶 Harmonic and Fibonacci Relationships
* **Measured Moves:**
The relationship **X–A = B–C** represents harmonic patterns where price swings are proportional, helping traders project potential price extensions or reversals.
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# 🧱 Resistance and Reversals
* **Equal Highs as Resistance:**
Areas of equal highs show price rejection, signaling a strong **resistance level**. These often precede **bearish corrections** as liquidity and momentum shift.
🎙️ Key Note:
**Liquidity flow** is the key to understanding price movement — it’s not just about where orders are sitting but about how momentum builds and moves through the market. Recognising this flow enhances your ability to trade with the market’s true intent.
Happy Trading,
Khiwe.
📘 Chart Patterns, Liquidity Flow, and Resistance in Forex Trading
In this guide we explore how to use **chart patterns**, **liquidity flow**, and **resistance areas** to enhance Forex trading strategies as defined here.
---
# 🧩 Chart Structure and Key Patterns
* **Liquidity Flow (Momentum):**
*Liquidity* here refers to the flow of price momentum. A **liquidity sweep** happens when price breaks through key levels, absorbing transactional activity and creating momentum. This flow often signals shifts in market direction and potential reversals.
* **Gap Closures:**
Price gaps (sudden candlestick jumps) often “fill” as the market returns to untraded areas. Traders watch for these gaps to provide potential targets or reversal points.
---
# 🧭 Market Structure and Momentum
* **Equal Highs & Lows:**
Equal lows act as **support**; when breached, they trigger liquidity-driven moves. Equal highs act as **resistance**, where repeated failure to break creates a strong seller presence, often leading to a reversal.
* **Momentum (MOM):**
Sharp momentum moves (labelled as “MOM”) signal potential market shifts. These moves often precede **liquidity sweeps** and can help traders anticipate upcoming price action.
---
# 💧 Liquidity and Order Flow
* **Bearish Candle Pressure:**
When price retraces to the **50% midpoint** of a dominant bearish candle, it can act as a resistance zone, where selling pressure resumes and liquidity is absorbed, pushing price lower.
---
#🔶 Harmonic and Fibonacci Relationships
* **Measured Moves:**
The relationship **X–A = B–C** represents harmonic patterns where price swings are proportional, helping traders project potential price extensions or reversals.
---
# 🧱 Resistance and Reversals
* **Equal Highs as Resistance:**
Areas of equal highs show price rejection, signaling a strong **resistance level**. These often precede **bearish corrections** as liquidity and momentum shift.
🎙️ Key Note:
**Liquidity flow** is the key to understanding price movement — it’s not just about where orders are sitting but about how momentum builds and moves through the market. Recognising this flow enhances your ability to trade with the market’s true intent.
Happy Trading,
Khiwe.
Haftungsausschluss
Die Informationen und Veröffentlichungen sind nicht als Finanz-, Anlage-, Handels- oder andere Arten von Ratschlägen oder Empfehlungen gedacht, die von TradingView bereitgestellt oder gebilligt werden, und stellen diese nicht dar. Lesen Sie mehr in den Nutzungsbedingungen.
Haftungsausschluss
Die Informationen und Veröffentlichungen sind nicht als Finanz-, Anlage-, Handels- oder andere Arten von Ratschlägen oder Empfehlungen gedacht, die von TradingView bereitgestellt oder gebilligt werden, und stellen diese nicht dar. Lesen Sie mehr in den Nutzungsbedingungen.