Buy-Side Liquidity (BSL)

Buy-side liquidity is the cluster of buy orders above a high. Protective stops of shorts sit there, and so do breakout buys. A push above the high trades into those orders. If price closes back below, the push was a sweep: the stops were collected and the breakout buyers are trapped. If price holds above, the same orders fuelled a breakout. The term names the pool above the market. It does not tell you which of the two outcomes you will get. Equal highs are the textbook location because many stops share one price. A single major high works the same way.

Mark the highs that a short would have used as a stop and that a breakout trader would have used as an entry. The session high, the prior day's high, and a pair of equal swing highs are enough. When price trades above, do not decide in the wick. Wait for the close back under the level, for a sweep-and-reverse, or for a close above and a hold, for a breakout. Entering short the moment the high prints is standing in front of the buy stops while they are still being hit.

The continuation use is bullish. A close above the highs that holds, with the sweep failing to reverse, means the buy stops were absorbed and there is still demand. That is a breakout, and fading it because "BSL must be swept and sold" is the slogan version of the idea. Let the close choose.

The reversal use is bearish. A pierce of the highs and a close back below, at a higher-timeframe resistance, is a short location. The stop goes above the sweep, not above the original high, because the sweep high is the price that should not be reclaimed. The target is the other side of the range, where sell-side liquidity sits.

Shorting every new high as a liquidity grab. In an uptrend the new high is often the trade, not the trap. Also placing BSL on a minor tick high that nobody would have used as a stop. The pool has to be obvious or the premise is empty. And moving the high after the fact so the wick "took BSL."

You cannot count the stops. A thin high can be pierced by a small order and look identical to a real pool being cleared. Without volume or delta, BSL is a horizontal line with a story. The story is plausible exactly to the extent the high was obvious in real time, which you should mark before the pierce, not after.