> For the complete documentation index, see [llms.txt](https://faq.midas-club.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://faq.midas-club.com/faq-en/faq-midas-up/liquidity-heatmap.md).

# Liquidity heatmap

<table data-card-size="large" data-view="cards"><thead><tr><th></th><th data-hidden data-card-cover data-type="image">Cover image</th></tr></thead><tbody><tr><td>How the liquidity heat map works:
<br>➡️<a href="https://youtu.be/T8gedl4z6y0">Watch on YouTube</a>
<br>➡️<a href="https://vk.com/video-228172732_456239143">Watch on VK</a></td><td><a href="/files/7c4039a926e78c07400bca306c8fd6734a84484b">/files/7c4039a926e78c07400bca306c8fd6734a84484b</a></td></tr><tr><td>How to trade using the liquidity heat map:
<br>➡️<a href="https://youtu.be/ZTcCOuGo1iU">Watch on YouTube</a>
<br>➡️<a href="https://vk.com/video-228172732_456239144">Watch on VK</a></td><td><a href="/files/9f12312690ba3d87161c44eade7ad2d42fb8b54c">/files/9f12312690ba3d87161c44eade7ad2d42fb8b54c</a></td></tr></tbody></table>

## Heat map markings on the chart

The heat map accurately shows where and in what volume liquidity is hidden <mark style="color:purple;">**liquidity**</mark> in the form of stop orders:

* <mark style="background-color:purple;">**Purple bars**</mark> below the price - stop orders of those who are in long positions
* <mark style="background-color:purple;">**Purple bars**</mark> above the price - stop orders of those who are in short positions
* <mark style="color:purple;">**Bright purple bars**</mark> - the maximum concentration of stops, which is a strong magnet for the price

{% tabs %}
{% tab title="Long stop-losses" %}

<figure><img src="/files/83caf113a7f58ef2ae4bf233d74a063348897da0" alt=""><figcaption></figcaption></figure>

In the example, we see the places where they hid their <mark style="color:purple;">**stop-losses**</mark> smaller market participants - behind local lows. Purple zones below the current price show clusters of stop-losses of those who opened long positions.&#x20;

This is where the price will move on the next decline to trigger these stop-losses.

After reaching these zones, a reversal upward is likely, which can be used to open a long position.
{% endtab %}

{% tab title="Short stop-losses" %}

<figure><img src="/files/1b1f9c3e256f12b859a442831972d48718f95015" alt=""><figcaption></figcaption></figure>

In the example, we see the places where they hid their <mark style="color:purple;">**stop-losses**</mark> smaller market participants - behind local highs. Purple zones above the current price show clusters of stop-losses of those who opened short positions.&#x20;

This is where the price will move on the next rise to trigger these stop-losses.

After reaching these zones, a reversal downward is likely, which can be used to open a short position.
{% endtab %}

{% tab title="Maximum concentration of stop-losses" %}

<figure><img src="/files/0603514c893ea297fcc177b00359b903e9937384" alt=""><figcaption></figcaption></figure>

In the example, we see <mark style="color:purple;">**bright purple line**</mark> - this is the maximum concentration of <mark style="color:purple;">**liquidity**</mark>, which will be a strong magnet for the price.

When it reaches <mark style="color:purple;">**purple**</mark> line, a reversal is most likely.
{% endtab %}
{% endtabs %}

## Using the heat map in trading

Price always gravitates toward zones with high <mark style="color:purple;">**liquidity**</mark>, here it is easier for large players to accumulate or lock in positions - they move the price into these zones to "take" stops from weak traders.

* Identify the nearest clusters <mark style="color:purple;">**liquidity**</mark>, to get ahead and trade in its direction
* When the price takes all <mark style="color:purple;">**liquidity**</mark>, it reverses - use these zones to build positions and take profit
* When <mark style="color:purple;">**liquidity**</mark> a lot accumulates, a cascading effect is possible - the price will accelerate, taking stops, until it collects all of them - after that it will reverse
* Do not place your stops in the liquidity cluster zone - otherwise you will become liquidity yourself

{% hint style="success" %}
First, try the simplest [trading strategy with liquidity](broken://pages/0e079cf820f867cc577b738bbebf9c43e290c49b#strategiya-torgovlya-ot-likvidnosti) from the indicator developer
{% endhint %}

{% tabs %}
{% tab title="Determine strong targets" %}

<figure><img src="/files/af6fc734bb20c0dc4c46465ca7deaf9d254e26b2" alt=""><figcaption></figcaption></figure>

In the example, we see how the price covered the accumulated <mark style="color:purple;">**liquidity**</mark> and formed a whole "pool" of new <mark style="color:purple;">**liquidity**</mark> (the stops of longs), which will be a strong magnet for the price.
{% endtab %}

{% tab title="We go for the targets" %}

<figure><img src="/files/d848e1f7a47402ce71cd1a45e3e18277e459671c" alt=""><figcaption></figcaption></figure>

In the example - the same chart, but a few hours later. We see how the price after accelerating reversed and went for <mark style="color:purple;">**liquidity**</mark> from below.

If you combine the analysis <mark style="color:purple;">**liquidity**</mark> with levels, you can with high probability accurately determine where the price will bounce off the level and where it will go.
{% endtab %}
{% endtabs %}

## How to trade using the liquidity heat map

<div align="left"><figure><img src="/files/97c29bdcb3cbaf6004b7aef86c8be1aefc398114" alt="" width="563"><figcaption><p>Example of trading on a signal while taking a large volume of liquidity</p></figcaption></figure></div>

We use signals and **liquidity heat map** in the form of hidden stops:

-when the price takes the liquidity volumes from below, we wait for a signal <mark style="color:green;">**BUY**</mark> and open <mark style="color:green;">**long**</mark>

-when the price takes the liquidity volumes from above, we wait for a signal <mark style="color:red;">**SELL**</mark> and open <mark style="color:red;">**short**</mark>

💡The larger the liquidity volumes taken by the price, the higher the chance of a bounce

💡Works best in trend continuation and sideways movement on higher timeframes

💡Experienced traders can open trades earlier, without waiting for a signal

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