8. Equal Highs (EQH) & Equal Lows (EQL): Engineered Retail Traps
Part of Chapter 06: Market Structure & Smart Money Price Action
- Why textbook 'double tops' and 'double bottoms' are engineered liquidity bait
- The concentration of stop losses above identical price peaks
- Anticipating the sweep: Trading the raid, not the bounce
Retail trading textbooks teach traders that Equal Highs (Double Tops) represent impenetrable resistance, and that Equal Lows (Double Bottoms) represent ironclad support.
Smart money algorithms know this. When you see two or more clean candle wicks touching the exact same dollar price, understand that this is deliberately engineered liquidity. Retail traders place their stop losses just 10 to 20 dollars beyond that level.
Institutions will intentionally push price through those Equal Highs or Equal Lows to trigger all resting stops, collect the liquidity, and instantly reverse the market in the opposite direction.
Whenever you spot clean Equal Highs on a 1-Hour chart, DO NOT short them. Target them as your take-profit level for a long trade, because price is almost guaranteed to sweep through them.
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All Lessons in Chapter 06
Market Structure & Smart Money Price Action (10 Lessons)