Buy-side & sell-side liquidity

Liquidity & Stop Hunts

Two tanks, two locations

Buy-side liquidity means resting buy-stop orders, parked above old highs by shorts protecting themselves and breakout traders going long. Sell-side liquidity means resting sell-stops below old lows, from longs protecting themselves and breakout shorts.

Price gets drawn to the thinner side

When one side of the market has more resting size built up than the other, that side becomes the higher-probability target. Not because of bias, but because that's where the bigger fill is available.

Both sides can get taken in one session

A session can run sell-side first, dipping to grab lows, then reverse and run buy-side, ripping to grab highs, or the other way around. Which side gets taken FIRST is often a clue to which direction holds for the rest of the session.