Lesson 7 — Top and Low Formation
Learn how tops and bottoms can form through liquidity sweeps, exhaustion, structure shifts, and accumulation/distribution.
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Login to Track ProgressMarket tops and lows rarely form randomly. They often appear after liquidity collection, exhaustion, failed continuation, accumulation, distribution, or structure shift. A trader should not call a top just because price is high, or a bottom just because price is low.
This lesson teaches students how to study top and low formation using Smart Money logic. A potential top may form after upside liquidity is taken and structure shifts downward. A potential low may form after downside liquidity is swept and price starts reclaiming structure.
Confirmation matters. Reversal areas require evidence. Students learn to wait for liquidity behavior, displacement, and structure change instead of trying to catch exact extremes.
The lesson helps students trade reversals more professionally and avoid emotional top/bottom picking.
1. Find one market top and one market bottom.
2. Mark liquidity taken before each reversal.
3. Identify the first structure shift after the reversal.
- 1. Why is high price not enough to call a top?
- 2. Why is low price not enough to call a bottom?
- 3. What role does liquidity play in reversals?
- 4. What confirms a possible reversal?
- 5. Why is catching exact tops and lows dangerous?