L3.3 — Range Edges and the Liquidity Trap at Equal Highs and Lows

Equal highs and equal lows — where price tags the same level multiple times without breaking through — are among the highest-probability liquidity targets in the market. Every touch of that level places another set of stops just beyond it. By the time a level has been tested three or four times, the cluster of stops above a range high or below a range low is substantial.

The trap is that a clean break of equal highs looks exactly like a legitimate breakout. Price breaks above the range, traders chase the breakout, and then price reverses back into the range leaving those traders trapped. This is not guaranteed to happen every time, but the probability is high enough that an experienced analyst approaches clean equal highs and lows with extreme caution rather than breakout enthusiasm.

The defensive rule: when a level has been tested multiple times, do not trade the initial break — wait for the breakout candle to close, then watch for whether price holds the broken level on the first pullback. A genuine breakout holds the level. A liquidity sweep reverses quickly and closes back inside the range.