One of the greatest difficulties for traders is to catch reversals with precision. Most end up going in too early or too late, missing the best profit window and risking more than they need to. Reversals are notoriously difficult to learn — but also very rewarding when executed correctly.
In this book, I expose my reversal system that enables traders to snipe exact turning points in the market with a proven combination of price action and intelligent confirmation tools. This applies on stocks, Forex, and crypto — and for all timeframes.
By using this technique, you can harvest gigantic risk-to-reward ratios, very little drawdown, and heightened profitability.
How to Spot and Trade Liquidity Grabs
Through a combination of liquidity grabs, savvy entries, divergences, and multi-timeframe analysis, this strategy gives you a potent advantage.
Let’s take it one step at a time.
Step 1: Spotting a Liquidity Grab
The initial part of the strategy is identifying a liquidity grab, where price makes a fake out above resistance or below support, activating stop-losses before turning around sharply.
Why is this significant? A liquidity grab pours fuel on the reversal move. When price breaks through a level, breakout traders tend to go long and put stops underneath the level. If the move is a fakeout, price reverses, which fires those stops — and that builds momentum in the opposing direction.
This, by itself, provides you the opportunity to profit on solid, impulsive reversals with high efficiency.
Backtested by well-known trader Thomas Bulkowski, liquidity grab patterns outperformed standard reversal setups, making them a key component of this strategy. Out of 14,000+ trades, patterns involving liquidity grabs saw significantly better returns than their counterparts.
Step 2: Entry Point — Trade the Grab Candle
Once you’ve identified a liquidity grab, the entry is very simple:
- For long trades: Enter at the high of the candle that grabbed liquidity below support.
- For short trades: Buy at the low of the candle that took out liquidity above resistance.
- This puts you in at the very beginning of the reversal move.
- Stop-loss: Slightly above the candle high (short) or below the candle low (long).
- Take-profit: At the next significant swing high/low.
- The outcome? A crazy risk-to-reward ratio, tiny stop-losses, and huge profit potential. Even when the strategy loses, the losses are small. But when it wins — the profits are huge.
Backtest Results and Automation
The strategy has been written into a private indicator which automatically:
- Identifies liquidity grabs
- Indicates entry candles
- Indicates buy/sell signals
- Color codes entries for simplicity
- Saves hours of chart work
When the indicator flashes a signal, it’s supported by all the logic of the strategy, allowing you to trade with confidence and reduced screen time.
For instance, the indicator identified a bearish liquidity grab followed by a signal. A short was entered with stop-loss just above and target at a recent low — leading to a strong drop and a profitable trade.
This process is repeated consistently — and when executed properly, it’s a repeatable edge.
Boosting the Strategy for Even Better Performance
Here’s how to do this to a higher level:
1. The 10-Candle Rule
Based on backtesting, liquidity grab peaks closer together than 10 candles result in a more extreme drop or rally than ones that are farther apart. So target:
- Peaks that are more tightly spaced
- Rapid reversals for bigger moves
2. Add Divergence for Confirmation
Utilizing indicators such as momentum oscillators, for example, on MetaTrader:
- If price is creating lower lows, but the oscillator is creating higher lows → this is bullish divergence.
- Add to that a bullish liquidity grab, and you’ve got a high-probability long.
- This validation raises win rates substantially.
3. Multi-Timeframe Support and Resistance
Trade liquidity grabs at the tops/bottoms of meaningful moves. Refrain from using it in the middle of trends.
Here’s how:
- On the lower time frame, notice the reversal signal
- Then validate the level on a higher time frame (e.g., 1H or 4H)
- If the grab of liquidity intersects with big support or resistance, it’s a high-probability opportunity
For example, if you’re on the 15-min chart and receive a buy signal — go to the 1-hour chart. If that same price level intersects with a solid support area, you’ve got confluence.
Steer clear of trades where the signal shows up mid-range of a big time frame’s — these are lower-probability.
Why This Reversal Strategy Excels
When individuals inquire, “Why trade reversals?” the response is straightforward: this is where the money is.
- Tighter stop-losses
- Massive profit potential
- High accuracy when paired with correct confluence
The system is flexible — applicable on Forex, crypto, or stocks, on any timeframe. With the indicator taking the heavy work out, even newcomers can implement it effectively.
Real Results, Real Edge
Let’s get down to earth — no system is 100% flawless. Losses will arise, particularly during volatile markets or false setups.
But the great thing about this approach is:
- Losses are minuscule
- Wins are massive
- The edge is mathematically sound
- It plays with structure and reason
Provided that you remain disciplined and avoid emotional trades, this strategy brings about steady growth over time.
Conclusion
In this article, I unveiled my reversal strategy in full detail. Here’s a brief summary:
- Step 1: Identify a liquidity grab at support/resistance
- Step 2: Get in on the candle that forms the grab
- Step 3: Use tight stop-loss and large take-profit
- Step 4: Use confirmations — divergence, time frame confluence, and peak distance
When all these align, your chance of catching massive reversals skyrockets.
Whether you’re a new trader or advanced, this method is easy to apply — and powerful when used with discipline. Try it out on demo first, then test it live when ready.
If you prefer the process to be automated, look at the TradingLab indicator (link in video description). It will do the analysis for you — simply follow the signals.