Struggling with Chasing Candles? The Proven Framework for Identifying Smart Money Liquidity

We’ve all been there. You’re sitting at your desk, the market opens, and suddenly: a massive green candle spikes. Your heart starts racing. You think, “This is it! I’m missing the move!”

You click buy. And almost instantly, the candle stalls, reverses, and leaves you holding a bag at the very top.

That feeling is called "chasing candles," and it is the single most common reason retail traders fail. In the industry, we call that candle "retail bait." You aren't seeing a breakout; you’re seeing the big players creating liquidity so they can fill their own orders in the opposite direction.

If you want to stop being the liquidity and start trading with the edge, you need to stop watching candles and start reading Market Structure.

What Exactly Is "Chasing Candles"?

Chasing candles is a reactive trading style. It’s based on FOMO (Fear Of Missing Out) and the belief that the "big move" is happening right now.

When you chase a candle, you are entering a trade because of price action that has already happened. You are late to the party. Smart money: the institutional banks and high-frequency algorithms: doesn't chase. They anticipate. They identify zones where liquidity is "resting" and they wait for price to come to them.

The Shift: From Candles to Smart Money Liquidity

To stop chasing, you must shift your perspective. Instead of asking "Is this candle going up?" you should be asking "Where is the liquidity?"

Liquidity is simply a collection of stop-losses. Institutions need these stops to be triggered so they can buy or sell large positions without moving the market too much. Common liquidity pools include:

• Previous Session Highs/Lows: The highs and lows of the London or New York sessions.
• Equal Highs/Lows: Areas where retail traders think there is "support" or "resistance." To a smart money trader, these are just targets to be swept.
• Fair Value Gaps (FVGs): Imbalances in the market where price moved so fast it left a "hole" that needs to be filled.

When you understand this, you realize that the big, fast candle you were about to chase is often just a "sweep": a move designed to grab liquidity before the real move starts.

The Proven Framework: Identifying Market Structure

At Trading With The Edge™, we teach a simplified framework for identifying these moves before they happen. We don't guess; we follow the footprint.

1. Define the High-Timeframe Narrative

Before you even look at a 1-minute or 5-minute chart, you must know the "story" on the Daily or 4-hour chart. Is the market in a bullish or bearish swing? If the Daily trend is bearish, that big green candle at the open is likely just a retracement into a supply zone.

2. Identify the Liquidity Pool

Where are the retail traders hiding their stops? Mark out the previous day's high and low. These are your "Points of Interest" (POIs). We don't trade in the middle of the range. We wait for price to reach the edges.

3. Wait for the "Change of Character" (CHOCH)

Once price hits your POI (like a previous day's high), don't just jump in. Wait for a shift in structure on a lower timeframe (like the 15-minute chart). When price breaks a recent swing low after hitting a high, that is your signal that smart money has stepped in.

The 9:25 AM Ritual: Your Gateway to Discipline

The most dangerous time for a trader is the first 30 minutes of the market open. This is when "chasing candles" is at its peak. The volatility is high, the candles are big, and the traps are set.

This is why we created the 9:25 AM Listening Party.

Every Monday through Thursday, from 9:25 AM to 9:32 AM, our community gathers. We don't just "watch charts." We prepare. We identify the liquidity pools, we mark our market structure, and we wait for the opening print to tell us its story.

By the time the 9:30 AM bell rings, we aren't chasing. We are positioned.

Why Community Matters

Trading is a solo sport, but you don't have to train alone. In our Skool trading community, we have created a private sanctuary for traders who are tired of the noise.

• The 24/7 Support Line: If it’s 2:14 AM and you’re stuck on a chart or feeling the urge to revenge trade, you don't have to go it alone. Call Rachel at (339) 204-0524. If she can’t solve it, she’ll make sure Dionyos does.
• The Scanner System: For just $29/month, you get access to the same scanners we use to identify these liquidity sweeps in real-time. (This used to be $125/month: we’ve brought the cost down to make it accessible for everyone in our community).
• VIP Harmony: For those ready to go deeper, our VIP Harmony tier ($97/month) provides the high-level mentorship needed to master the 8/8 pillars of professional trading.

Join Us Tomorrow at 9:25 AM

Stopping the habit of chasing candles isn't about willpower. It’s about having a system. It’s about having a ritual that forces you to be a professional before the market even opens.

We are currently a tight-knit community of 10 members. Our "Legacy" membership is limited to 100 people, and we only have 90 spots remaining. We aren't looking for thousands of people; we are looking for the few who are ready to treat trading like the high-level profession it is.

It’s free to join the Skool community and attend our daily Listening Parties.

Come see what it feels like to have "The Edge." Come see what it feels like to wait for the market to come to you, rather than running after it.

Click here to join the Trading With The Edge™ Skool community.

Join us tomorrow at 9:25 AM.

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Target Topic: Trading Psychology and Market Structure
Keywords: Trading With The Edge, Skool trading community, market structure, smart money liquidity, chasing candles, Dionyos Royall, 9:25 AM Listening Party.