Buyside liquidity and sellside liquidity are the two pools of resting orders that every institutional move is built around. Buyside liquidity sits above the market — the buy-stop orders parked above equal highs, swing highs and prior-day highs. Sellside liquidity sits below the market — the sell-stop orders below equal lows and prior-day lows. Smart money does not chase price; it moves price toward these pools to get filled.
Where the pools form
Liquidity concentrates wherever a lot of traders are forced to place the same stop. The most dependable pools:
- Equal highs and equal lows — the clearest invitation; double and triple tops/bottoms.
- Previous day / week / month highs and lows — reference levels the whole market watches.
- Session highs and lows — Asia range, London high/low, the order-block origins.
- Trendline and pattern stops — the orders clustered under an obvious trendline.
Draw on liquidity: the market’s compass
At any moment, price has a draw on liquidity — the pool it is most likely to move toward next. Identifying that draw is what turns liquidity from a concept into a directional bias. If buyside liquidity above a clean set of equal highs is unswept while the higher-timeframe trend is up, that pool is the logical target, and a sweep of it becomes the setup to prepare for.
Using buyside and sellside liquidity in practice
- Mark the obvious pools before the session opens — do not improvise mid-move.
- Expect price to reach for the pool, sweep it, and reverse rather than break cleanly.
- Pair the swept pool with an order block or fair value gap for the entry.
- Use the opposing pool as your take-profit target — liquidity runs to liquidity.
Key takeaways
- Buyside liquidity rests above highs; sellside liquidity rests below lows.
- Pools form at equal highs/lows, prior-day levels and session extremes.
- The unswept pool aligned with HTF bias is the draw on liquidity.
- Price runs from one pool to the other — use that for targets.