ICT Mentorship Core Content - Month 1 - Liquidity Runs

Liquidity in ICT's framework refers specifically to buy stops resting above old highs (buy side liquidity) and sell stops resting below old lows (sell side liquidity). These resting orders are the targets that price gravitates toward, as market makers and institutional traders seek to fill orders by running these levels. This reframes the market from pattern-based analysis to order-flow targeting.

When a swing high forms and price moves lower, traders who shorted at that high place protective buy stop orders just above it. The market has a natural tendency to return to these levels to trigger those stops, effectively "running" the liquidity. Understanding this principle allows traders to anticipate where price will be drawn to on the upside.

Conversely, when a swing low forms and price rallies away, buyers who entered at that low place protective sell stop orders just below it. The market seeks these levels to trigger those stops and capture sell-side liquidity. This is the mirror image of buy-side liquidity and completes the two-sided view of the marketplace.

When price must travel through numerous intermediate highs and lows—a thick area of price action with many peaks and troughs—to reach a distant liquidity target, this constitutes a high resistance liquidity run. These are low-probability trading conditions because each intermediate level acts as resistance, and only major catalysts like FOMC announcements or non-farm payroll releases typically have enough force to cut through all these levels.