Kagebbasi

Last night, the market printed a massive wick that shook out everyone. I woke up to panic, but my portfolio was safe. Why? Because I trade liquidity, not hype.

Let's break down what happened, and more importantly, how you can position yourself to profit from it next time.

1. Why Was The Wick So Large?

That long candle wick you see on the chart is a liquidity grab. Here’s the simple version:

· The Trap: The market slowly drifts down, building up a large number of stop-loss orders and leveraged short positions below a key level.
· The Sweep: The price makes a violent, rapid move DOWN to precisely collect ("sweep") all those stop-losses and liquidate those shorts. This creates the long lower wick.
· The Reversal: Once the liquidity is taken, the reason for the move down is gone. With sellers exhausted and liquidations complete, the price often reverses sharply back up.

That wick isn't a sign of pure chaos; it's the market's mechanism for resetting and finding a true direction.

2. How Can You Avoid Being The Liquidity?

This is the most important part. You never want to be the one whose stop-loss gets taken. My core rules:

· Minimal Position Size: Never put more than 1-2% of your portfolio on a single open position. This prevents any single trade from significantly hurting you.
· Buy The Liquidity, Not The Hype: Instead of FOMO-buying breakouts, I place my buy orders below the market, in these liquidity zones (where the wicks form). I'm essentially buying the fear.
· Portfolio Cap: I never have more than 10% of my total portfolio in open positions at any given time. This ensures I always have dry powder to buy these dips.
· Know Your Levels: Always know where key liquidity pools are. That's your shopping list.

Remember: The wicks are the OPPORTUNITY. In spot, it's a discount. In futures, it's a potential reversal signal.

My Story Last Night

While everyone was watching charts in a panic, I was asleep. My buy orders were already set in the liquidity zone below. The market did its job, swept the liquidity, filled my orders, and reversed. I woke up to a portfolio that had navigated the storm perfectly.

This isn't luck. It's a system.

If you're tired of being on the wrong side of these moves and want to learn a disciplined, strategic approach, follow my insights. It’s about making the market work for you, even while you sleep.

Stay disciplined, trade smart.

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#TradingStrategy #RiskManagement #Binance #Wicks #BuyTheDip