Most aspiring traders find it difficult to identify the perfect strategy to continuously make profits in the stock market. With there being so many complicated techniques available, it becomes overwhelming. The difficulty is discovering something that performs immediately without the need for decades of experience.
In this article, I will give you a quick, powerful trading strategy that earned me $70,536 in 60 days. The strategy is straightforward using just several important principles and a suitable trading platform, such as TradingView.
How to Trade Liquidity Zones?
If you are prepared to make significant profits, this 5-step strategy is what you are looking for. It’s simple, does not demand intricate skills, and specializes in real practical trade implementation. Let’s get started:
Step 1: Mark Liquidity Zones
The initial step in this trading strategy is to mark important liquidity zones on the chart. These are merely the highest and lowest points of price action. By marking these zones, you can forecast possible areas of price reversal or breakout.
How to Mark Liquidity Zones:
- On your chart, mark the highest and lowest points.
- These areas will inform your choice of where the price will go.
This step lays the groundwork for all subsequent trades in this strategy.
Step 2: Identify the Time Zone to Trade
The second important step is choosing the appropriate timeframe for placing your trades. For this strategy, we concentrate on a particular time frame:
Best Timeframe to Trade:
- The best time for this strategy is between 9:30 AM and 11:00 AM EST.
- This time is crucial because it’s when the market is most volatile, which makes it better for trade setups.
By restricting trades to this timeframe, you’re guaranteeing you’re only trading in the best market conditions.
Step 3: Wait for Price to Break the Liquidity Zones
Once you’ve marked the liquidity zones and defined your trading time, the next step is to wait for price action to break one of these zones.
What to Look For:
- If the price breaks above the high zone, you’ll be preparing for a potential short position.
- If it breaks below the low zone, prepare for a long position.
In my example, when the price broke below the lower liquidity area, it warned of a possible downward move, which is what we were hoping for.
Step 4: Locate the Sniper Entry
The entry is the most important aspect of the strategy, and this is where most traders fail. This is how you can make sure you are entering at the correct time:
How to Get the Best Entry:
- Go to a smaller time frame (such as the 1-minute chart).
- Search for the prior swing high or low, which serves as your pivot.
- Once price penetrates this point, you recognize that a structure shift in the market is occurring.
- Search for a “fair value gap” – a gap produced by a big price move. This gap will serve as your entry target.
This entry setup allows you to enter at the best point in the trend for the best risk-to-reward ratio.
Step 5: Determine Your Entry, Stop Loss, and Take Profit
With the ideal entry determined, now it’s time to determine your position:
Establishing Your Trade:
- Entry: Enter your limit order in the middle of the fair value gap.
- Stop Loss: Place your stop loss slightly below the low of the fair value gap candle, or for added security, place it below the low of the entire price movement.
- Take Profit: Place your take profit at the high that you designated previously in the strategy.
This action has your trade initiated with the correct risk-to-reward ratio, limiting potential loss and maximizing possible gain.
Final Thoughts on This Strategy
Following these 5 steps, I managed to earn more than $70,000 within a span of only two months. It’s a plain tactic but one that has turned out to be vastly powerful. I would recommend applying this tactic using TradingView since it enables you to map your moves and monitor market trends with ease.
Ready to Start Trading?
If you want to give this strategy a try yourself, you can follow along and use the checklist I’ve included. And don’t forget to let me know how it goes for you on Instagram – I’d love to see what happens!