📌 Professional traders do not look at each tool separately… they merge them to get a complete mental map of money movement in the market.
Here, integrating liquidation maps with Open Interest gives you a nearly perfect view to anticipate big hunting before it happens.
🧠 First: Understand each tool separately
1️⃣ Liquidation Maps
• Exposed price levels that will lead to the liquidation of margin or futures contracts.
• Every high liquidity point on the map = A clustered set of Stop Loss orders or margin liquidations.
• These areas act as a magnet for the price, as whales love to “hunt” this liquidity.
2️⃣ Open Interest
• Measures the number of open contracts currently in the market.
• Increase in OI = Inflow of new money and additional positions.
• Decrease in OI = Outflow of money or closing positions.
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📊 Second: Merging the two tools
Step 1: Identify target areas
Start by reading the liquidation map and identify:
• Where are the largest clusters of liquidations?
• Are these levels above the current price (possible rise) or below it (possible drop)?
Step 2: Monitor OI changes around these areas
• If OI increases as the price approaches a liquidation area
This means that new traders are entering positions, increasing the likelihood of these liquidations being hit quickly.
• If OI decreases as you approach
This may mean that positions are closing before reaching, weakening the likelihood of targeting the level.
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🔍 Third: Professional scenarios
1️⃣ Bullish hunting scenario (Long Liquidation Trap)
• Price is moving downward towards a large long liquidation area.
• Suddenly, OI rises, meaning the market is receiving new sellers.
• Whales push the price down to liquidate those, then quickly reverse the direction.
2️⃣ Bearish hunting scenario (Short Liquidation Trap)
• Price is moving upward towards a massive short liquidation area.
• OI suddenly jumps → Entry of new buyers.
• After hitting the liquidations, the price may quickly reverse downward.
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⚠️ Fourth: How do you benefit as a trader?
• Early entry: Watch for the moment when a “massive liquidation area” coincides with “high OI” to be prepared before the explosion.
• Smart exit: After hitting the liquidations, watch for a drop in OI, as this may indicate the start of a correction or reversal.
• Risk management: Do not enter with large contracts directly, but use a gradual position size especially at major liquidation areas.
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🚀 The golden summary
Merging Liquidation Maps with Open Interest gives you:
• A three-dimensional view of money movement. 🧩
• Ability to anticipate “liquidity traps” before they occur. 🪤
• The advantage of entering and exiting before 80% of the market. ⏱
