EZ Peezy Trading - SMC Quiz (Part 1)

What type of Point of Interest (POI) is this?

• Buyside Liquidity

• Sellside Liquidity

• Fair Value Gap

• Order Block

Answer explanation

Buy Side Liquidity is an area where sellers have kept their stop losses.
Traders tend to keep their stop losses above high and low, so the high of an area is considered as a buy side liquidity zone.

What type of Point of Interest (POI) is this?

• Buyside Liquidity

• Sellside Liquidity

• Fair Value Gap

• Order Block

Answer explanation

Sell Side Liquidity is an area where buyers have kept their stop losses.
Buyers tend to keep their stop losses below old swing lows, session lows, and previous day/week lows. So the low of an area is considered as a sell side liquidity zone.

What type of Point of Interest (POI) is this?

• Buyside Liquidity

• Sellside Liquidity

• Fair Value Gap

• Order Block

Answer explanation

Fair Value Gaps are most commonly used amongst price action traders and are defined as instances in which there are inefficiencies, or imbalances, in the market. These ‘imbalances’ simply suggest that buying and selling are not equal.

Fair Value Gaps are created within a three-candle sequence and are commonly visualized on the chart as a large candle whose neighboring candles’ upper and lower wicks do not fully overlap the large candle.

What type of Fair Value Gap (FVG) is this?

• Bullish FVG

• Bearish FVG

• Inverted FVG

• That's not an FVG, that's an Order Block

Answer explanation

A bullish Fair Value Gap is created when there is a gap between the high of the first candle and the low of the third candle.

What type of Fair Value Gap (FVG) is this?

• Bullish FVG

• Bearish FVG

• Inverted FVG

• That's not an FVG, that's an Order Block

Answer explanation

A bearish Fair Value Gap is created when there is a gap between the low of the first candle and the high of the third candle.

What type of Point of Interest (POI) is this?

• Buyside Liquidity

• Sellside Liquidity

• Fair Value Gap

• Order Block

Answer explanation

Order blocks are like little tip-offs telling us when the big fish in the market, like major banks and big businesses, are about to make a big splash. Think of the Central Bank as the big boss who sets the game rules, so traders need to keep an eye on what they're doing.

When an order block shows up, it's like the market taking a coffee break, moving a bit up and down, and chilling out. This is when the big decisions on buying and selling are made. Once the coffee break's over and the order block is done forming, the market usually starts running in one direction or the other, kinda like a sprinter out of the blocks.

The secret to getting order blocks is that they give us a sneak peek into what the big players in the market are up to. Using order blocks can help you decide when to jump into a trade and boost your chances of making a winning move. 

What type of Order Block is this?

• Bearish Order Block

• Bullish Order Block

• Not an Order Block, that's an FVG

Answer explanation

A Bullish Order Block is formed following a bullish impulsive wave that breaks a ranging market structure. This block is significant because when the price returns to this zone, it signals an opportune moment for traders to open buy orders. By doing so, traders align their strategies with those of the market’s major players, often resulting in profitable outcomes.

What type of Order Block is this?

• Bearish Order Block

• Bullish Order Block

• Not an Order Block, that's an FVG

Answer explanation

A Bearish Order Block is created after a bearish impulsive wave disrupts the price range. When the price revisits this zone, it’s a cue for traders to consider opening sell orders, once again aligning with the strategies of large market players.