RADEX MARKETS Editorial Team
The RADEX MARKETS editorial team consists of seasoned financial professionals and market observers. Dedicated to delivering objective market summaries, macroeconomic insights, and educational content, the team strives to keep traders well-informed in a fast-paced financial environment.
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Buy side liquidity is the pool of buy orders resting above obvious highs on a chart: short sellers' stop-losses plus breakout entries. Sell side liquidity is the mirror image: sell orders resting below obvious lows. Ever wondered why price so often stretches just past a clean high or low before turning? These two pools are the answer. And if you have ever been stopped out by a wick that reversed a second later, you have already met them; you just hadn't been introduced.
Quick word before we start: this is a chart-reading concept, and it has nothing to do with the "buy side vs sell side" of the finance industry, where the terms describe funds and brokers.
In this guide I'll cover what each pool is, exactly where both sit, how to identify them on your own charts, and how traders actually put them to work: the strategies, a step-by-step routine, the psychology that keeps the pools forming, and the habits that cost traders the most money at these levels.
Buy side liquidity is the cluster of buy orders sitting above visible highs; sell side liquidity is the mirror cluster of sell orders below visible lows. Price is often drawn to these pools, so knowing where they sit helps you anticipate which levels the market may reach for before it turns.
Ready to mark these levels on a live chart?
Buy side and sell side liquidity are the two pools of resting orders the market gravitates towards. Why there and not somewhere else? Stops protecting short positions live above old highs; stops protecting long positions live below old lows; and breakout traders park their entry orders at the very same levels. That double stack of stops plus entries is what turns an ordinary high or low into a magnet (and yes, the stop you tucked two pips past the high counts too).
A liquidity pool is a price area where a large number of pending orders sit waiting to be filled. The bigger and more visible the pool, the more likely price is to reach for it.
The vocabulary comes from a school of chart analysis called Smart Money Concepts, spread widely through ICT-style teaching. Strip away the jargon and the idea is old and simple: orders cluster where everyone can see the same level, and the market visits the places where orders live. For me that plain version was worth more than a year of indicator tweaking: once I accepted that my own stop is just another resting order sitting in someone's pool, the whole concept clicked.
Item |
Buy Side Liquidity (BSL) |
Sell Side Liquidity (SSL) |
|---|---|---|
| Sits | Above obvious highs | Below obvious lows |
| Made of | Short sellers' stop-losses + breakout buy orders | Long holders' stop-losses + breakout sell orders |
| Typical levels | Old highs, equal highs, round numbers above price | Old lows, equal lows, round numbers below price |
| When taken | Price spikes above the high, fills the buys | Price spikes below the low, fills the sells |
Buy side liquidity is the pool of buy orders resting above obvious highs — stops on short positions plus breakout buy orders. Two groups build it: traders who are short and must buy to exit if price rises, and traders waiting to buy a confirmed break higher. A dense pocket of guaranteed buyers is exactly where sell-heavy positions get filled, which is why price is drawn there. A BSL pocket only marks where those resting orders sit; what price does after they are filled is a separate question.
Sell side liquidity is the pool of sell orders resting below obvious lows — stops on long positions plus breakout sell orders. Longs who must sell to exit build one half of it; traders waiting to sell a confirmed break lower build the other. The market reaches down for this pocket just as readily as it reaches up for BSL, and for the same reason: guaranteed counterparties.
The mechanism is identical — the difference is location and what a raid on each side implies. When sell side liquidity below a low is taken and price snaps back above it, the sell orders below have been filled and bias tilts bullish. When buy side liquidity above a high is taken and price snaps back below it, the buy orders above have been filled and bias tilts bearish.
In my experience the sell side raid is the one that catches retail traders hardest: more beginners hold longs than shorts, so the heavier crowd of stops tends to pile up under the lows, and that is where I have seen the most painful wicks.
Scenario |
Event |
Interpretation |
|---|---|---|
| SSL taken, price closes back above the low | Longs' stops swept below a low | Bullish bias — sell orders below are filled |
| BSL taken, price closes back below the high | Shorts' stops swept above a high | Bearish bias — buy orders above are filled |
| Level breaks and price keeps going | Genuine breakout, not a raid | No reversal read — trend continuation |
One nuance keeps this table useful: the bias reading only counts when price closes back inside the range. A breakout that holds beyond the level is the market actually leaving.
When a liquidity pool is taken, the resting orders get filled in one burst: price spikes through the level, and whether it then holds beyond or snaps back tells you if you watched a breakout or a raid.
The reason this keeps happening is mechanical. Large positions cannot be filled without someone on the other side of the trade, and a stacked pool of stops is the one place the other side is guaranteed to show up. So price "reaches for" these levels because that is where the volume lives — mechanics, not conspiracy. It matters to you for an uncomfortable reason: your stop is part of someone's fill. The first time I saw my own exit price print as the low of the day, I stopped taking raids personally and started keeping notes on where I had parked the stop instead.
Picture GBP/USD with an obvious high at 1.2764. Price pushes up, spikes to 1.2771, fills the buy orders parked above the high, then closes the candle back below 1.2764. The pool above the high has been taken, the resting buy orders have been filled, and the bias for the next move tilts bearish.
A liquidity raid is a fast push through an obvious high or low that fills the orders resting there and then returns inside the old range. Traders also call it a sweep or a stop run, depending on the school.
Read more: Liquidity Grab Guide: Definition, Signals & Trading Techniques
The pools form on their own: every stop and pending order left on the chart adds to one, and the more obvious the level, the more orders pile onto it. So identification is simply marking the levels where the crowd's orders must be, above price for buy side, below price for sell side. My own pre-London routine is exactly this: mark yesterday's high and low, circle any equal highs or lows, note the nearest round number. Five minutes on a live chart with a broker such as RADEX MARKETS, and the session's map is set. Four kinds of level do most of the work.
The previous day's and week's highs and lows are the most-watched lines on any chart, which makes them the most reliable pools (everyone watches them, and that is precisely the point). Stops and breakout orders stack just beyond them: buy side liquidity above the highs, sell side liquidity below the lows. In my experience yesterday's high and low produce more clean raids than every other level combined, so they are the first two lines I draw each morning. If you mark nothing else, mark these.
Equal highs and equal lows are two or more touches at nearly the same price. The crowd reads the double touch as proof the level will hold, so stops stack right behind it, and that stack of stops is exactly what makes the level a target. The cleaner the equal levels look, the bigger the pool sitting behind them. My own trade journal is blunt about this: the prettier a set of equal lows looked to me, the more often the third touch swept them before the real bounce came.
Equal highs (EQH) are two or more swing highs printed at almost the same price; equal lows (EQL) are the mirror at the bottom. Both act as visible reference points where the crowd parks stops, which is why they attract raids.
Round numbers pull in orders for no deeper reason than human habit, and the effect is measurable: a Federal Reserve Bank of New York study of a major dealing bank's order book found that almost 10% of stop-loss and take-profit orders were placed at rates ending in 00, such as 1.4300 (Osler, Stop-Loss Orders and Price Cascades in Currency Markets). Session extremes behave the same way: the Asia-session high and low are often the first pools the market reaches for when London opens. Both can hold either pool — above current price they are BSL, below it SSL. I have stopped fighting the habit myself; my take-profit orders still drift towards the round figure, so I assume everyone else's do too and treat every 00 level as a small pool by default.
A pool being tapped leaves a signature: a long wick punching through the level, a quick close back inside the range, and often a burst of tick volume as the resting orders fill. Recognising that signature is the identification skill; deciding what to do about it is the next section.
The table below compresses all of it into one reference you can keep beside your charts.
Level |
Side |
Pool |
Reason |
|---|---|---|---|
| Previous day/week high | Above | BSL | Shorts' stops + breakout buys above the most-watched high |
| Previous day/week low | Below | SSL | Longs' stops + breakout sells below the most-watched low |
| Equal highs (EQH) | Above | BSL | Crowd trusts the double touch → stops stack just above |
| Equal lows (EQL) | Below | SSL | Same read at the lows → stops stack just below |
| Round numbers | Above or below | Either | Habit levels collect stops, targets and entries |
| Session extremes | Above or below | Either | First pools reached for at the next session's open |
Read more: What is liquidity in Forex and how is it measured
Traders use buy side and sell side liquidity in two directions: fading a raid after price snaps back inside the range, or riding a genuine breakout once the pool has been cleared. In both cases the pools do the same job — they define where entries make sense, where stops belong, and where targets are waiting. This is where the levels you marked turn into trade decisions.
Fading the raid means waiting for a pool to be taken and for price to close back inside the range, then trading back towards the opposite side. You saw the spike, you saw the failure, and now you trade the failure. The snap-back close is my entry condition; until it prints, there is no trade to take, because during the spike itself you have no evidence of which outcome you are in. The cost of this strategy is simple: some raids keep running, and those losses are what you pay for taking the pattern.
Read more: Liquidity Sweep: How It Works and How to Trade It
Trading the real breakout means joining the move only after a cleared level holds on the retest. Once a pool is swept and price stays beyond it, the orders that were resting there have been filled, so fewer resting orders remain to stall the move. Enter on the retest rather than the first candle through. In my first month with this pattern I skipped the retest, bought first candles, and lost the difference; the rule exists because I needed it. You will often be late by design, and that lateness is what confirms you are in a breakout rather than a raid.
Placing stops beyond the pools means parking your exit past the wick zone of the nearest pool instead of inside it, where it would sit with everyone else's stops. Suppose you are long EUR/USD from 1.0871 with equal lows sitting at 1.0843. A stop 2 pips under the lows at 1.0841 lives inside the pool; a stop 14 pips beyond it at 1.0829 survives the typical sweep. A wider stop means a smaller position for the same risk, and in my view it is the single most worthwhile trade-off in this whole article. Most traders who complain about stop hunts are really complaining about where they parked the stop.
Targeting the opposite pool means using the far pool as your take-profit level: a long entered after an SSL raid aims at the buy side liquidity above, and a short entered after a BSL raid aims at the sell side liquidity below. When the distance is large, taking partial profit at the nearer pool keeps the trade calm; on a quiet session the nearer pool is often all you get, and my view is you take it and say thank you. Neither pool is guaranteed to be reached, so treat targets as probabilities.
Everything above compresses into a routine you can repeat every session, and the routine does not change whether it is a sleepy Tuesday or an NFP Friday:
Step 6 changed my own results more than any entry technique. Moving stops from 2–3 pips under an equal low to 12–15 pips beyond the wick zone roughly halved how often I was clipped before the move I actually wanted. The entries stayed the same; only the parking spot changed.
Liquidity pools exist because of how people think, which is why they refuse to disappear no matter how many articles are written about them.
Stops cluster at obvious levels because everyone anchors to the same reference points: the same high, the same double top, the same round number. A level feels protective precisely because it is visible, and visibility is what fills the pool. The collectively obvious spot becomes, collectively, the least safe spot on the chart. I know the trap and I still feel the pull to hide my stop "just under the low" every single time; the instinct never switches off, I just override it with the routine.
Big players hunt liquidity pools because they need volume, and a stacked pool is the only place a guaranteed counterparty exists. Nobody is chasing your fifty-dollar stop; an institution filling a large position simply has to trade where the orders are, and the orders are behind the obvious levels. Reading raids as order-filling keeps you analytical. Reading them as persecution turns every loss into a story about being cheated, and stories like that cost money.
A stop hunt is a move that pushes price into a cluster of stop-loss orders, triggers them, and then reverses. The name suggests intent, but in liquid markets the effect usually comes from large players filling positions where the resting orders sit.
The pools keep refilling because of an emotional loop. FOMO places breakout buy orders above the high and adds to the buy side pool; fear places stops just under the obvious low and adds to the sell side pool. I have made this exact mistake myself: I once bought the first spike through a London-morning high, 9 pips above the level, and watched the raid finish four minutes later with my position 23 pips underwater before the real move started — without me. The market did not trick me; I chose that entry.
Most liquidity losses come from a short list of repeatable habits. Each one below tells you what it causes, with an example of how it plays out:
Every habit on this list has a mirror fix in the step-by-step routine above. I have committed all five at some point, which is exactly why the fixes are written as a checklist rather than as advice. None of them needs new knowledge, only the discipline to use what you already marked on the chart.
Buy side liquidity is the pool of buy orders resting above obvious highs on a chart: stop-losses protecting short positions plus breakout buy orders. Price is often drawn towards these clusters because they guarantee willing buyers at that level.
Sell side liquidity is the pool of sell orders resting below obvious lows: stop-losses protecting long positions plus breakout sell orders. It is the mirror image of buy side liquidity, sitting on the underside of the chart.
The buy orders above the high get filled in one burst and price spikes through the level. If price then closes back below the high, the move reads as a raid with a bearish tilt; if it holds above, it reads as a genuine breakout.
Mark the levels where resting orders visibly cluster: previous day and week highs and lows, equal highs and equal lows, round numbers, and session extremes. Zones above current price hold buy side liquidity; zones below hold sell side liquidity.
In ICT and Smart Money Concepts vocabulary, liquidity means the clusters of resting orders, mostly stop-losses, that the market seeks out, split into buy side liquidity above highs and sell side liquidity below lows.
A liquidity sweep is a fast run through a liquidity pool that fills the resting orders and then snaps back inside the range. It is one of the clearest signs that a level was raided rather than genuinely broken.
Traders fade a raid after price snaps back inside the range, join a breakout once the cleared level holds on the retest, keep their stops beyond the obvious pools rather than inside them, and use the opposite pool as a natural target.
Buy side and sell side liquidity are simply the two big clusters of resting orders: buys stacked above the highs, sells stacked below the lows. Once you know where the pools sit, the spikes that used to look random start to carry information: which side was taken, whether price snapped back or held, and what that says about the next move.
The working rules are short. Mark the pools before you enter. Read raids and breakouts by the close, not the spike. Keep your own stop out of the crowd's pool. Aim at the opposite side and accept partials on the way. When you are ready to go deeper, the liquidity sweep and liquidity grab guides below pick up exactly where this one stops.
After enough sessions watching these levels, my conclusion is a plain one: marking the pools does not tell you where price will go next; it tells you where the crowd's stop and entry orders are waiting. The real information arrives after those orders are filled: a close back inside the range points to a reversal, a hold beyond the level points to a genuine breakout, and everything before that close is movement you do not have to trade.
The RADEX MARKETS editorial team consists of seasoned financial professionals and market observers. Dedicated to delivering objective market summaries, macroeconomic insights, and educational content, the team strives to keep traders well-informed in a fast-paced financial environment.
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