Smart Money Trading essentially suggests an approach to interpreting where liquidity is headed, similar to that of other professional traders with decades of experience.

Clearly, everything is in flux, so you also need to be aware of what is happening, for example, if there is a “liquidity trap/grab” situation.

For example, economic data is published, and gold (like other instruments) takes a clear direction. Some behave in one way, others in another.

At the stock and index level, there could be a rush and then a recovery/reversal in the medium/long term.

With gold, there may be a temporary recovery (return to the previous direction/liquidity).

After this correction, the trend reappears, assuming (as before) a recovery.

In reality, the trend continues and we remain trapped.

Perhaps for days.

However, as soon as we realize that we have actually carried out our trades, all we have left is common sense, and we may then decide to close to avoid further losses.

But in any case, we did what we had to do, so that’s fine.

So where is liquidity headed? Now that we know this clearly, we also know that it could fluctuate and take note of this.

In the fluctuations and macro-movement, you can spot the deal.

Of course, it is better to move with as few fluctuations as possible, and in the macro-movement, but if you also understand the micro-movements, they could be programmed, as they are usually very fast, and you can avoid spending the whole day at the computer, obviously with stop losses and take profits set rationally, not too tight to avoid closures and continuous profits but requiring continuous re-setting of the same.

Rather, we should set the stop loss a little more than the (first) previous high-low and the take profit a little less than 3 candles (in a row) close to the first value of the first previous higher-high (highest price). This way, we are less stingy and more ‘courageous’ with less fear of the risk of loss.

However, assess the impact of a possible loss, and that a good risk/reward ratio is between 0.5 and 3-5% for special occasions, such as if you manage to move during the release of economic data or you notice a possible good deal and trend.

Of course, it is good to consider first how much you can lose and always set a stop loss, as the price could move very quickly, particularly during the publication of market data and various markets that could have a direct and indirect impact on other markets.

Today, with TradingView, you can drag these two buttons (SL – Stop Loss | TP – Take Profit) to see how a possible change could impact your capital.

Be careful not to press enter too quickly; observe first.
When you are ready, you can simply click “Buy” or “Sell” on the chart, the button next to the other two mentioned above.

In fact, you could run the risk of clicking buy or sell at the current market price, and perhaps that was not what you wanted. In particular, it would be an added difficulty without stop loss, as it could force you to immediately close the position at a loss to avoid further losses.

In any case, be patient, we did what was appropriate.

Remember to set your stop loss before your take profit.

So, in summary, liquidity is clearly towards the upper limits of the buy or sell prices. However, the structure can change constantly.

Source of the article: https://www.ganjingworld.com/s/aaAGW77qaJ