The Liquidation Strategy is for scalp traders only.
For the journeyman of scalp trading, this is a bespoke technique that was created in-house with an extremely high win rate.
Although it's not essential, combining Tradingview and Exo Charts for this strategy will give you a greater edge.
Exo Charts will give you the benefit of seeing where liquidations take place, providing you with an opportunity to execute on a trade.
To apply this strategy you will also need to familiarise yourself with the liquidation calculator on ByBit.
The key to this strategy is in the name... Liquidity aka volume.
If you are still unfamiliar with analysing volume it is recommended that you study the Footprint charts module.
Time Stamps
2:43 – LIQUIDATION STRATEGY
- This is a very unique strategy that Daniel made himself as he saw the same thing happening over and over again. He recognised the pattern, put some rules to it and he came to this strategy
- It has an extremely high win rate
- Keep in mind this strategy is only for scalp traders (swing and day traders cannot use it)
- Watch for an area of consolidation at the pivotal level
- Daniel uses both, Trading view and Exo Charts (not mandatory but very helpful to see the volume – high volume preferred)
- Trade the liquidation wick for quick reversal
6:24 – EXAMPLES
- Daniel uses the calculator on Bybit page to see the liquidation of 100x leverage of the level of consolidation. When you see where the liquidation price is, you place the buy order just below that price. Do not buy the exact liquidation price but a bit below (there is likely a wick – slippage) the liquidation price.
- So, when there is a consolidation under the resistance and high volume around consolidation low, we look for a quick leverage flush before snapback reversal.
- On Exo Charts we can also see liquidations in form of bubbles (Rekt)
- Another option is to wait and market order as soon as the price starts to turn around – liquidation bubbles help you to recognise this
- Market order could be safer, and when you have more experience to recognise a potentially good trade, you can use limit
- Daniel takes profit on S/R level, moves SL to entry and he keeps the trade running
- The invalidation is always the wick (on a 1minute chart)
- SFP + liquidation strategy is very powerful
- Targets are subjective, Daniel likes to be conservative
- Daniel loves to use this strategy at psychological levels
- Footprint software adds confluence (delta, CVD etc.)
20:13 – LIVE EXAMPLES
- Clear targets – quick exits – even better entries
27:12 – Q&A + ANOTHER EXAMPLE
- Slippage varies – usually 0.2% so market orders can usually offer better and safer entries
- This strategy can only be applied in trending markets when there is high volume
36:54 – SUMMARY