Liquidity Concepts

When to Use

• Choosing targets and judging whether a breakout will hold.
• Explaining a fast move through a level followed by a reversal.

How It Works

In an autonomous cycle the bar briefing (bar_briefing, the harness-tools
skill) already holds this bar's values: m3 (EMAs, ADX, SuperTrend, Keltner,
ATR, VWAP, participation, the skip-rule counters in context, swings and
liquidity, lastBreak, sweeps, htfLevels, the nearest levels in points
and R), m15 and h1 (the higher frames). Use it, and compute only what it
doesn't hold.
The sweeps (m3 sweeps) are computed there, by the definition below:
never call one by eye.

1. Map resting liquidity (stops cluster just beyond obvious levels):
   • Prior RTH high/low/close and overnight high/low (market-snapshot levels).
   • Equal highs/lows: 2+ swing points within ~2 ticks of each other.
   • Opening range high/low, weekly high/low, round numbers (MNQ: every
     100 points; MES: every 25).
2. Sweep vs break.
   • Sweep: price trades through the level and closes back inside within
     1–3 bars on the trigger timeframe. Stops were taken; often reverses.
   • Break: a candle closes beyond the level and the next pullback holds
     it (old resistance becomes support). Continuation.
   • No call until the close. Wicks are information, not signals.
3. Fair value gap (FVG): a 3-bar pattern where bar 1's high is below bar 3's
   low (bullish) or bar 1's low is above bar 3's high (bearish). Price often
   revisits the gap; a gap that holds on retest supports continuation.
4. Use.
   • Targets: the next untested liquidity pool in the trade's direction.
   • Skip: don't buy just under prior-day high or sell just above
     prior-day low unless the strategy is a breakout of that level.
   • Reversal setups (cisd_ote strategy) need a sweep first; continuation
     setups (bos strategy) need a break.

Examples

Overnight high 21614.75 and prior-day high 21615.00 (equal highs, one tick
apart). The 09:39 ET 3m bar wicks to 21624.00 and closes 21606.00. → sweep of a double liquidity pool. Long ideas
paused; watch for a bearish CISD / BOS down for a short with stop above 21624.