🔄 Internal Liquidity vs. External Liquidity 💧🔓
Mastering this distinction is how smart money baits retail traders, then steals their entries.
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🔍 Internal vs. External Liquidity — Know Who’s Being Hunted 🎯🐍
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🧠 What Is Liquidity in SMC?
Liquidity = clusters of stop-losses, pending orders, or trapped traders.
Big players target these zones to fuel their positions 🐋
But not all liquidity is equal…
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🔹 External Liquidity = Obvious Targets
• Swing highs/lows
• Equal highs/lows
• Major support/resistance levels
• Retail breakout/breakdown zones
→ Everyone sees this
→ Whales hunt this 💥
📌 When price breaks external liquidity, expect a fakeout or reversal
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🔸 Internal Liquidity = Trap Zones Inside the Range
• Lower highs & higher lows
• Mid-range structures
• Liquidity within consolidation
→ Invisible to retail
→ Used to manipulate entries before big move 🤫
📌 Internal liquidity is used to induce entries → then price sweeps external
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💡 Real-World Example:
1. Price consolidates → builds internal liquidity
2. Retail takes early entries inside the range
3. Price sweeps external liquidity (swing high/low)
4. Then reverses — leaving both sides trapped 😮💨
🧲 SMC traders wait for this whole story to play out → then enter on mitigation of the OB or FVG
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📈 Strategy Flow:
1. Identify internal liquidity zones = trap setup
2. Mark external liquidity = final target
3. Wait for sweep of external liquidity + BOS
4. Enter on return to OB / FVG combo
5. Target other side’s liquidity = sniper R:R
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✅ This Is the Hidden Game:
• Retail trades the breakout
• Smart money hunts the breakout
• You trade the reaction after the trap
Understand liquidity dynamics = Predict where the pain will be 🔮
