Liquidity pools and session killzones

By AnalytikCapital · Updated October 3, 2026

In Smart Money Concepts, liquidity means clusters of resting orders, mostly stop-losses, above swing highs (buy-side) and below swing lows (sell-side) that price is expected to run before a sustained move. Killzones are session windows, usually quoted in New York time for Asia, London and New York, when those runs are said to happen most often.

What are buy-side and sell-side liquidity?

A stop order waits at a set price and becomes a market order once price reaches it. Traders who are short usually park buy stops above a recent high; traders who are long park sell stops below a recent low. Breakout traders add entry orders at the same places.

• Buy-side liquidity (BSL) is the pool of buy orders resting above highs.
• Sell-side liquidity (SSL) is the pool of sell orders resting below lows.

SMC’s argument is that a large seller needs buyers, and a run up through a high triggers a burst of them. So price is expected to visit these pools before a sustained move in the other direction. In Episode 2 of his 2022 mentorship, ICT describes a drop that “attacks” sell-side liquidity below a low and then reverses toward relative equal highs above.

Note that this is not what economists mean by market liquidity, which is how easily an asset can be traded without moving its price. SMC uses the word for a location on the chart.

Why do equal highs and equal lows matter?

Two or more highs at nearly the same price form an obvious ceiling, and obvious levels attract stops. ICT calls these “relative equal highs” and “relative equal lows” and, in Episode 3, prefers them as targets over a single old high.

There is some independent evidence for the mechanics. C. L. Osler (Federal Reserve Bank of New York) studied currency markets at price levels where stop-loss orders had been documented to cluster, and found that exchange-rate trends run unusually fast when those levels are reached: triggered stops feed self-reinforcing “price cascades”. That supports the idea of stop clusters. It does not show that anyone deliberately targets them.

What AnalytikCapital’s engine does. It groups two or more swing highs (or lows) whose prices sit within a tenth of the 14-period average true range of the first one. The level is drawn at the most extreme member, the highest high or the lowest low, because stops rest beyond the whole cluster. It also tracks the previous completed day’s high and low and the previous completed week’s high and low.

What is a stop run or liquidity sweep?

A sweep is a run through a liquidity level that fails: the wick goes beyond the high or low, the stops are triggered, and the candle closes back on the original side. If the candle instead closes beyond the level and keeps going, the stops were fuel for a continuation, not a reversal.

In ICT’s examples, the sweep is the setup, not the signal. The signal comes afterwards, when price breaks a short-term swing in the opposite direction (see market structure shift).

What AnalytikCapital’s engine does. A level becomes live once it is fully formed. The first candle whose wick crosses it while its close stays on the original side marks the level swept; only that first sweep is recorded. A close beyond the level is not a sweep.

How do premium and discount relate to liquidity?

SMC pairs the two ideas: buy in the discount half of the range and aim for buy-side liquidity above, or sell in the premium half and aim for sell-side liquidity below. The premium and discount split is explained on the overview page. AnalytikCapital’s plan engine follows this order of preference for targets: equal highs or lows first, then the previous day and week extremes, then the near edge of opposite zones.

What are the ICT killzones?

Killzones are the intraday windows when, in ICT teaching, the important runs and reversals tend to happen. Everyone agrees on the idea. Almost no two sources give the same clock times:

ICT himself varies the window by market: in Episode 2 he watches index futures from about 8:30 to 11:00 a.m., and in Episode 3 he looks for intraday shifts in the E-mini contracts between 8:30 a.m. and noon. FXOpen quotes its windows in GMT and moves them with daylight saving, which is why the Asian window lands an hour apart in New York time between winter and summer.

What AnalytikCapital’s engine does. It uses the four windows in the last column on the New York clock, with daylight saving resolved automatically, so the windows stay fixed in ET all year. They are drawn only on charts of one hour or less, because a session window means nothing on a daily bar. They are context on the chart: the plan engine does not use killzones as a filter. Each window is configurable, since no single source is authoritative.

What is Power of 3?

Power of 3 (PO3), also called AMD, is an ICT model that splits a trading day, or any range, into three phases:

1. Accumulation: a quiet, narrow range, often the Asian session.
2. Manipulation: a run beyond one side of that range to take liquidity, often in London.
3. Distribution: the real directional move, often in New York.

FXOpen’s explanation describes it this way. It is practitioner theory. The three-phase idea resembles the accumulation and distribution phases of Dow theory, but there is no published testing of PO3 as a daily pattern, and AnalytikCapital’s engine does not detect it.

What are the limits?

• Times are conventions. As the table shows, windows differ by source, by market and by daylight-saving rule. A rule that works on one clock can fail on another.
• Not every session sweeps. Many days take no obvious level, and many sweeps are followed by continuation, not reversal.
• Equities and crypto differ from forex. US stocks trade a regular session that opens at 9:30 a.m. ET; crypto never closes. Killzones were built around currency and index-futures sessions.
• Evidence covers mechanics, not intent. Stop clusters and cascades are documented; deliberate stop hunting and session “algorithms” are not.

The methodology page shows how liquidity levels become plan targets in AnalytikCapital.

Educational content, not financial advice. Trading involves substantial risk of loss.