What Is a Liquidity Void 🤔
These zones are created by strong, impulsive candles that slice through levels without resistance, often due to news, panic, or a liquidity grab.
🔍 In these voids, there's little to no consolidation or price acceptance. The market didn't spend time there, which means it left behind an "unfinished auction." These areas almost always attract price back later just like gaps on futures markets.
🕯 Why does this matter? Because price tends to revisit these inefficient zones. It's not guaranteed, but many traders treat them as magnets.
Typical signs of a liquidity void 👇
1️⃣A long candle with little to no wick
2️⃣Fast move through a previous range without pullbacks
3️⃣No visible structure or consolidation in the area
4️⃣Move was fueled mainly due to liquidation cascade
If prices pumps/dumps too fast and you're not quick enough to open your position, using these liquidity voids with fair value gaps can be a good place for your limit orders instead of chasing the price 👀