ERL vs IRL – Liquidity Made Simple
Price action is a constant rotation between two targets:
✅ ERL (External Range Liquidity) – swing highs & lows stacked with stops. Once taken, focus shifts inward.
✅ IRL (Internal Range Liquidity) – imbalances & Fair Value Gaps. When rebalanced, price often seeks outside levels again.
👉 The cycle is simple: ERL → IRL → ERL.
Expansion fuels rebalancing, and rebalancing fuels the next expansion.
Key notes:
• Works fractally on all timeframes (cleaner on HTFs).
• If IRL fails, the swing that created it becomes the new magnet.
Master this flow and you’ll stop seeing random candles - you’ll start seeing liquidity rotation
