Technical analysis by Mentor_Michael03 about Symbol PAXG on 10/22/2025

Hello Traders! Let’s break down one of the most powerful concepts in market structure — how smart money manipulates liquidity before major price moves. Understanding this concept is essential for identifying true market direction and avoiding retail traps. 1️⃣ Liquidity – The Fuel of the Market Liquidity represents the resting orders in the market, usually sitting above swing highs and below swing lows. Institutions and large players target these areas to fill their massive positions. When you see equal highs or lows forming — that’s often a liquidity pool waiting to be taken out. 💡 Tip: Don’t enter trades right before liquidity zones. Wait for them to be taken first — it often signals a manipulation or reversal setup. 2️⃣ Stop Hunt – The Smart Money Trap A stop hunt happens when the price temporarily breaks a key level to trigger stop losses of retail traders. This move creates a false breakout and allows institutional traders to enter at better prices. 📊 Example: If everyone places buy stops above resistance, the price will spike up, hit those orders (liquidity grab), and then drop sharply — trapping late buyers. 🧠 Lesson: Learn to recognize these traps. A stop hunt often precedes the real move in the opposite direction. 3️⃣ Order Block – The Origin of Institutional Moves After liquidity is taken and stop hunts occur, the market forms an order block — the last bullish or bearish candle before a strong impulsive move. This is where smart money placed their final orders. When the price returns to this area later, it often reacts strongly, creating ideal entry points for traders who understand market structure. 🎯 Pro Tip: Combine order blocks with liquidity grabs for high-probability setups — this is the core of Smart Money Concepts (SMC). 4️⃣ How It All Connects Liquidity → builds up from retail traders’ orders. Stop Hunt → removes weak positions, triggering liquidity. Order Block → institutional entry zone for the next big move. Together, these stages reveal how the market truly operates — not random movements, but intentional liquidity engineering by large market participants. ✅ Educational Summary 📘 Markets are designed to hunt liquidity and trap emotions. By learning how to read liquidity, stop hunts, and order blocks, you can trade alongside the institutions — not against them.