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In Forex trading, a Liquidity Trading Strategy (popularized by Smart Money Concepts / ICT) focuses on trading with institutional players (banks, hedge funds) by identifying where retail stop-loss orders are trapped.
Because institutions execute massive trade volumes (millions/billions of dollars), they need large pools of counterparties to fill their orders without incurring massive slippage. Liquidity strategies capitalize on the market movements created when price sweeps these order pools.
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