Draw On Liquidity And Directional Bias
A 1-minute lesson from the MarketPro academy, one of 22 in smart money concepts.
"Draw on liquidity" describes the idea that price tends to gravitate toward the nearest significant pool of resting orders, and using it to form a directional bias means asking which liquidity pool is more likely to be reached next. Rather than only asking "is this an uptrend or downtrend," this approach asks where the obvious untapped liquidity is sitting — for example, equal highs above the current range versus equal lows below it — and treats the more prominent, more obvious pool as the more probable draw.
"Draw on liquidity" describes the idea that price tends to gravitate toward the nearest significant pool of resting orders, and using it to form a directional bias means asking which liquidity pool is more likely to be reached next.
Building A Bias Around Liquidity
Rather than only asking "is this an uptrend or downtrend," this approach asks where the obvious untapped liquidity is sitting — for example, equal highs above the current range versus equal lows below it — and treats the more prominent, more obvious pool as the more probable draw. Combined with current structure, this can support (or contradict) a bias built from trend and swing points alone.
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