Buy-side liquidity (BSL)
Also called BSL. What it means, how it looks on a gold (XAUUSD) chart, and the mistake most traders make with it.
Buy-side liquidity: Buy-side liquidity is the pool of buy orders above swing highs and equal highs: stop losses of short sellers and buy-stop breakout entries.
Buy-side liquidity on a gold chart
Gold tops at $4,151 on Monday and again at $4,150 on Tuesday. Above $4,151 sit the stops of everyone who sold those highs. A spike to $4,155 during the New York open that quickly reverses is a raid on that buy-side liquidity.
How traders use it
In a bullish bias, buy-side liquidity is the target for longs. In a bearish bias, a sweep of it is the setup for a short.
Common mistake
Assuming a break above the highs is a breakout. Without acceptance above the level, it is often just the liquidity being taken before a reversal.
Questions
What does buy-side liquidity mean in trading?
Buy-side liquidity is the pool of buy orders above swing highs and equal highs: stop losses of short sellers and buy-stop breakout entries.
How is buy-side liquidity used on gold (XAUUSD)?
In a bullish bias, buy-side liquidity is the target for longs. In a bearish bias, a sweep of it is the setup for a short.
Educational content, not financial advice. Every concept here is a probability, not a guarantee.
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