Chart Fanatics
July 19, 2026
Trading Below Lows for Optimal Entry Points
TL;DR
Professional traders gain an edge by entering buy positions below previous lows where retail traders place stop-losses, rather than following standard support-resistance levels.
Key Takeaways
- 1Retail traders typically buy at identified support levels, but professional traders exploit this by entering below the lows where liquidity is concentrated
- 2Price often creates false reactions at resistance/support before continuing in the primary direction, providing entry opportunities
- 3The strategy involves waiting for price to break below previous lows and collect liquidity before reversing to move significantly higher
- 4This approach targets institutional stop-losses and trapped retail traders to create a favorable risk-reward setup
- 5Timing entries below lows rather than at standard technical levels gives traders a superior entry point before major upside moves
Notable Quotes
“But we want to buy below lows, sell above highs.”
“Typically what happens afterwards, the price will move all the way to the upside.”
Chapters
1. Understanding Market Structure and Liquidity
Markets move in high-low patterns, with price creating levels of liquidity below lows where retail traders expect support. Professional traders target these areas rather than obvious technical levels.
2. Retail vs. Professional Trading Approaches
Retail traders use Fibonacci, structure, and standard technical analysis to buy at apparent support levels. Professional traders instead look to buy below these lows to capture liquidity and trapped orders.
3. The Entry Strategy Below Lows
Traders wait for price to break below the previous low, triggering retail stop-losses and institutional orders. Once this liquidity level is taken, they enter buy positions in anticipation of a significant upside move.
4. Price Action After Entry
After entering below the low and collecting liquidity, price typically moves aggressively to the upside, rewarding traders who waited for the break rather than buying at the apparent support level.
Glossary
- Liquidity
- Concentration of buy or sell orders at specific price levels, often where retail traders have placed stop-losses
- Support/Resistance
- Price levels where buyers (support) and sellers (resistance) are expected to enter, based on previous price action
- False Reaction
- A temporary price movement that appears to confirm a level before reversing in the primary direction
- Fibonacci
- A technical analysis tool using mathematical ratios to identify potential support and resistance levels