04 / 10 — LIQUIDITY
Module 04
Price moves through liquidity.
Resting Liquidity
Orders currently waiting in the book.
Traded Liquidity
Orders that have actually interacted with market orders.
Developing Liquidity
Liquidity building or persisting as the market approaches an important location.
Liquidity PoolsBid LiquidityAsk LiquidityLiquidity WallsPulling LiquidityAdding LiquidityPersistent LiquidityLiquidity DefenseLiquidity ConsumptionThin LiquidityFailed Liquidity Break
Large visible liquidity does NOT guarantee that price will reverse. Orders can be pulled. Liquidity can be consumed. Large orders can also attract price rather than repel it. Therefore FATBOOK evaluates liquidity together with price, location, delta, CVD, and participation.
Liquidity at EXT
01Is liquidity forming beyond EXT?
02Is liquidity defending EXT?
03Are aggressive participants consuming it?
04Is price continuing efficiently?
05Does liquidity remain after repeated attacks?
06Is price failing to establish acceptance beyond the level?
FATBOOK Rule
LIQUIDITY IS INFORMATION — NOT A WALL YOU BLINDLY TRADE AGAINST.
Next: quantify the aggression sitting behind that liquidity.
Continue to Delta & CVD →