Buy-side liquidity rests above highs, sell-side below lows. What these levels actually represent, why price is drawn toward them, and how to use them as targets rather than mysteries.
Buy-side liquidity (BSL) is the cluster of stop orders and breakout buy orders resting above a prior high. Sell-side liquidity (SSL) is the equivalent below a prior low. Both are real: anyone short has a stop above the high, anyone long has one below the low, and breakout traders queue orders in the same places.
Not because an algorithm hunts you. Stop orders cluster at obvious levels, and when price reaches them they execute as market orders, which adds pressure in the same direction and can cascade. This effect is documented in academic work on stop-loss orders and price cascades in currency markets. The cascade is real; the conspiracy around it is not.
Treat BSL and SSL as the most probable magnets, and therefore as targets rather than entries. The weekly high and low are the strongest of these because they hold the most accumulated orders. Whether a level is a draw or an invalidation depends entirely on your directional bias: with a bearish read, sell-side is the draw and buy-side is where you are wrong.
Weekly BSL and SSL are published as the primary draw, with previous day and previous week high and low as intermediate levels. Each is tracked from untouched through approaching, at level, reached and breached, and sweep detection requires the full test — wick exceeds the level, body does not close beyond it, and price closes back inside within two bars.
WHICH ONE COSTS YOU MONEY? Most traders leak money the same way twice. Five questions, thirty seconds, no email — find out which way is yours. TAKE THE READ →