LIQUDITY C H A S I N G THE MULTI TIMEFRAME LIQUIDITY STRATEGY @CHASINGLIQUIDITY @CHASINGLIQUIDITY Strategy Booklet Multi Timeframe Momentum & Liquidity Trading (Detailed Guide) Chasing Liquidity @CHASINGLIQUIDITY AUTHOR: CHASING LIQUIDITY This booklet explains step by step, a structured multi timeframe trading strategy based on weekly/daily bias, higher timeframe momentum, 15m liquidity sweeps, and lower timeframe execution. Contents: 1. Overview & Core Concepts 2. Master Timeframe (Daily) - Bias 3. Higher Timeframes (4H/2H/1H) - Momentum 4. Medium Timeframe (30m/15m) - Liquidity Setup 5. Lower Timeframe (3m/1m) - Execution 6. Order Management, Stop/Target, Risk 7. Example Trade Walkthrough 8. Checklist & Trade Log Template This booklet is designed for intraday traders focused on FX and indices. @CHASINGLIQUIDITY Core premise: • Use the daily timeframe to set a directional bias for the week. • Align higher timeframe momentum (4H/2H/1H) with the daily bias. • Use the 15 minute timeframe to identify external liquidity sweeps and mark the resulting demand/supply zones (trap zones). • Drop to 3m/1m to confirm structure (false break → true break) and enter on a lower timeframe liquidity sweep and engulfing candle. Key definitions: • Liquidity sweep: Price movement that runs above/below obvious highs/lows to gather resting orders (stops, limit orders). • Trap/demand zone: The leg/area that swept liquidity often becomes a magnet where price returns to fill orders. • True break of structure (BOS): A confirmed shift in market structure after a false break has trapped participants. Why this works: liquidity hunters often clear stops then use the imbalance left behind to fuel momentum. By aligning bias + momentum + structure, you trade the flow created by institutional activity. Overview & Core Concepts @CHASINGLIQUIDITY Purpose: The daily timeframe sets the directional context for the week. It is NOT used for intraday entries but as a bias filter to align trades with the 'bigger move'. Step-by-step: 1. At the start of the week and trading day, review the daily chart and answer: • Did yesterday's candle close bullish or bearish? • Is the daily range (recent few days) showing higher highs / higher lows (bull) or lower highs / lower lows (bear)? 2. Identify key daily levels: recent swing highs/lows, support/resistance zones, and areas with clustered liquidity (previous highs/lows and consolidation). 3. Label the bias clearly: BULLISH / BEARISH / NEUTRAL. Only take setups that agree with the bias (or trade contra with strict rules if you must). Practical tips: • Use a simple color code on your charts: green for bullish bias, red for bearish. • If the daily bias is neutral, either avoid trading or only take the highest probability setups with tight risk control. Master Timeframe - Daily (Bias) @CHASINGLIQUIDITY Purpose: Confirm momentum and structure across multiple higher intraday timeframes. Step-by-step: 1. On 4H / 2H / 1H charts, mark market structure: draw higher highs (HH) and higher lows (HL) for bullish momentum, or lower highs (LH) and lower lows (LL) for bearish. 2. Look for confluence: When multiple higher timeframes point in the same direction, strength of the momentum increases. 3. Note where momentum is 'running' (strong impulse candles) vs. 'range bound'. How to use this for alignment: • Only prepare setups on the 15m if the higher timeframe momentum aligns with the daily bias. Example: Daily = bullish, 4H/2H momentum shows HH/HL → prioritize long setups. • If higher timeframe shows mixed structure, be selective and prefer the strongest confluence (e.g., both 4H and 2H agree). Higher Timeframes - 4H / 2H / 1H (Momentum) @CHASINGLIQUIDITY Purpose: Identify external liquidity sweeps and mark the trap (demand/supply) zone on the 15m chart where price is likely to return. Step-by-step (overview): 1. Watch for an external liquidity sweep: a move that pushes above a clear recent high (for longs) or below a clear recent low (for shorts), often with wick/candle exhaustion. 2. Once swept, the leg that pierced liquidity becomes the candidate zone (bottom of that leg for longs; top of that leg for shorts). Mark this as a demand/supply area or TRAPS. Important notes: • Liquidity sweeps are often accompanied by rapid wick formation, high wick to body ratios, or one sided volume. They may happen away from session opens. • The 15m acts as the 'setup timeframe', it shows where liquidity was taken and where price will likely return to fill orders. Medium Timeframe - 30m / 15m (Liquidity Setup) @CHASINGLIQUIDITY How to draw the zone: 1. Identify the wick or leg that swept liquidity. For longs, draw the zone from the wick low up to the preceding consolidation low (a small band). 2. Keep the zone tight, not an overly wide rectangle. The more precise the zone, the clearer the target and risk/reward. 3. Annotate the zone as TRAP Price behaviour after sweep: • Price often 'tests' or returns to this zone to fill liquidity and then continues in the direction of the higher timeframe momentum or maybe reverse. • If price returns and stalls without a clean rejection, re evaluate the setup: the sweep may have been a fake or the structural context may have changed. Continued- Marking Demand / Supply Zones TRAPS @CHASINGLIQUIDITY Purpose: Precisely time entries using structure shifts on lower timeframes after the 15m liquidity sweep has been established. Sequence to watch for (execution flow): 1. After the 15m sweep zone is marked, wait for price to approach the zone. 2. Drop to the 3m or 1m to watch order flow and micro structure. 3. Look for a FALSE BREAK: price briefly breaches a level (e.g. swing low) and then reverses back inside indicates trapped participants. Why false breaks matter: False breaks often signal that liquidity was grabbed and that institutional orders may be absorbing flow, setting up for a stronger move once structure flips. Lower Timeframe - 3m / 1m (Execution) @CHASINGLIQUIDITY True Break of Structure (BOS): After a false break, wait for a clear shift: a higher timeframe true break is when the market prints a new structure in the direction of the anticipated move (e.g, for a long: price breaks above a local high and holds). Lower TF Liquidity Sweep & Engulfing Entry: 1. Once the true break has occurred, watch for a lower-timeframe liquidity sweep (a micro-run to take out micro-stops) in the same direction. 2. Enter on the first clean engulfing candle that confirms rejection of the sweep (bullish engulfing for long entries; bearish engulfing for shorts). Execution checklist before entry: • Daily bias aligned? • Higher timeframe momentum aligned? • 15m sweep zone valid and not breached beyond reason? • Micro structure shows false break → true break → lower TF sweep? Continued - True Break, Lower TF Sweep & Entry @CHASINGLIQUIDITY @CHASINGLIQUIDITY Stop placement (recommended): • Place stop just beyond the high/low on the LEFT of the lower timeframe liquidity sweep area (the area where liquidity was taken in the lower timeframe). • This means the stop is logically placed where the invalidation of the micro-setup occurs not arbitrary. Target placement: • Primary target (TP1): the high (for longs) or low (for shorts) of the 15m demand/supply zone. • Secondary target (TP2, optional): the opposite side of the larger macro range or a measured move target if the momentum is very strong. Risk per trade: • Keep risk consistent — typical size: 0.5%-1% of account per trade (adapt per plan). • If using multi leg (TP1 partial + TP2), adjust position sizing so total risk remains within your limit. Stops, Targets & Risk Management @CHASINGLIQUIDITY Schematic @CHASINGLIQUIDITY Trade Management rules: • If price reaches TP1, consider booking partial profit and moving stop to breakeven for the rest. • If price action at TP1 shows exhaustion (large wick, loss of momentum), close if your target of 1.5 or 2R is hit. • If momentum is strong and structural context remains aligned, let the remainder run to TP2. What to do on invalidation: • If price breaks back through the 15m zone and higher timeframe structure flips, let it run and if its a loss, take it and journal it. Never exit the trade. • Avoid increasing size or revenge trading. Log the trade and review. Trade Management & Scaling @CHASINGLIQUIDITY Common pitfalls: • Chasing entries before structure confirms (entering on first touch of zone without micro confirmation). • Misdrawn zones (too wide or unclear) which worsen R:R and decision-making. • Taking setups against daily bias without strict rules. How to avoid: • Wait for micro confirmation (false break → true break → lower-TF sweep → engulfing). • Keep zones precise and annotate them with context/time. • Use strict risk per trade and never exceed it during emotions. Common Patterns, pitfalls & How to Avoid Them Scenario (short): EURUSD intraday 1. Daily: Bearish bias (yesterday closed bullish, daily range upward). 2. Higher TF: 4H/2H show HH/HL structure supporting shorts. 3. 15m: Price runs above the recent swing high(external liquidity sweep)(x) forming a neat wick and leaving a demand leg (mark zone from wick low to consolidation low). Action: Mark the 15m demand zone/trap and switch to lower timeframe for possible entry. @CHASINGLIQUIDITY Example Trade Walkthrough Setup Execution: 1. Price returns to marked 15m zone and sweeps it. 2. Drop to 1m/3m: observe a false break(FB) below a local LTF low. 3. After a bit of pullback, watch for a true break(TB) of local structure to the downside 4. LTF liquidity sweep(x) above the immediate LTF high clears small stops, then wait for a bearish engulfing candle to form- this is the entry trigger. Management: • Place SL just above the immediate LTF high or where liquidity was swept (left side). • TP1 at top of 15m demand zone. Move partial to breakeven at TP1, let the rest run. @CHASINGLIQUIDITY Continued - Execution & Management Pre-market / Start-of-week checklist: Daily bias set (Bull / Bear / Neutral) Key daily levels marked Higher TF (4H/2H/1H) momentum marked (HH/HL or LH/LL) 15m sweep zones identified and annotated Session times noted (London / NY) Trade Plan Template (fill before entry): • Pair: _______ • Bias: _______ • Higher TF structure: _______ • 15m zone in line with HTF: (Y/N) _______ • Lower TF reversal (Y/N): ____ • Entry price: ____ • SL: ____ (pips) • TP1 / TP2: ____ / ____ • Risk %: ____ • Notes: @CHASINGLIQUIDITY Daily Checklist & Trade Plan Template Use this log to record every trade and build pattern recognition: • Date / Time: ____ • Pair: ____ • Bias (Daily / Higher TF): ____ • Setup type: 15m liquidity sweep → 1m/3m/5m engulfing • Entry / Exit: ____ / ____ • R:R achieved: ____ • Outcome (Win/Loss): ____ Reflection prompts (post-trade): • What went right? • What went wrong? • Did I follow the checklist? If not, why? • Emotional state during trade: • What will I change next time? @CHASINGLIQUIDITY Trade Log & Reflection Prompts Final recommendations: • Practice this flow in a demo environment until you can reliably identify sweeps and execute on lower TF confirmations. • Keep your trade journal updated and review weekly. • If you plan to share this booklet publicly, consider adding annotated screenshots of live trades to illustrate each step (recommended). References & further reading: • Mark Douglas — Trading in the Zone (mindset) • Curtis Faith — Way of the Turtle (system & edge) • ICT / Michael Huddleston materials (liquidity & market structure) for concepts and algorithm • Larry Harris — Trading & Exchanges (market microstructure) ALWAYS, Trade the momentum, manage the risk, and journal every step. Donot forget to enjoy the journey. Good luck! @CHASINGLIQUIDITY Final Notes, References & Next Steps