Institutional Price Action Cheat Sheet
Trade like the smart money. Order blocks, liquidity sweeps, break of structure, change of character, and fair value gaps explained in one reference.
🎓 Learn Smart Money Concepts Inside PAN Elite🧱 Order Blocks
Last footprint before the impulse
💧 Liquidity
Stops resting above/below structure
🔀 BOS / CHoCH
Structure shifts confirming direction
⚡ Fair Value Gap
Imbalance price often revisits
Core Institutional Concepts Overview
| Concept | What It Is | How Price Reacts | Trader's Use |
|---|---|---|---|
| Order Block | Last down/up candle before a strong impulse | Price often returns to mitigate it | Entry zone on retracement |
| Liquidity Pool | Stop clusters above highs / below lows | Price sweeps through to fill orders | Target for reversals, avoid as stop placement |
| Stop Hunt / Sweep | Fast wick through a liquidity pool | Sharp reversal back into range | Confirms reversal, entry after sweep |
| Break of Structure (BOS) | Close beyond a prior swing in trend direction | Confirms trend continuation | Bias confirmation, look for pullback entry |
| Change of Character (CHoCH) | First break of structure against the trend | Early warning of a potential reversal | Shift bias, tighten risk on old trend trades |
| Fair Value Gap (FVG) | 3-candle imbalance, gap between wick 1 and 3 | Price often retraces to fill the gap | Secondary entry zone, confluence with OB |
🧱 Order Blocks
Bullish Order Block
What to Look For:
• The last down-close candle before a strong up impulse
• Ideally the impulse breaks structure
Entry Approach:
• Wait for price to return into the block
• Confirm with a bullish rejection candle
Invalidation:
• A full close through the block with volume
Bearish Order Block
Last up-close candle before a strong down impulse
Best when the impulse breaks structure downward
Enter on the retrace into the block
Look for bearish rejection before committing
Stack confluence
Order block + FVG + liquidity above = higher probability
💧 Liquidity Sweeps & Stop Hunts
Buy-Side Liquidity
Location: Just above equal highs / prior swing highs
Who's resting there: Short sellers' stops, breakout buyers
Typical outcome: Wick sweep then reversal down
Trade idea: Fade the sweep once structure confirms
Equal highs are a magnet, not a resistance to trade against blindly
Sell-Side Liquidity
Location: Just below equal lows / prior swing lows
Who's resting there: Long traders' stops, breakout sellers
Typical outcome: Wick sweep then reversal up
Trade idea: Fade the sweep once structure confirms
Look for a quick reclaim of the level, not just a touch
Reading a Genuine Sweep
Speed: Sharp wick, not a grinding push
Volume: Spike on the sweep candle
Close: Back inside the prior range
Follow-through: CHoCH on a lower timeframe
A close beyond the level with continuation is a breakout, not a sweep
🔀 Break of Structure vs Change of Character
Break of Structure (BOS)
Definition:
A close beyond the most recent swing high (uptrend) or swing low (downtrend), in the direction of the existing trend
How to Use It:
• Confirms trend continuation
• Look to buy/sell the next pullback into an order block or FVG
Change of Character (CHoCH)
Definition:
The first break of structure against the prevailing trend — the earliest technical sign momentum is shifting
How to Use It:
• Tighten stops or exit old-trend positions
• Wait for a retest of the CHoCH level before reversing
⚡ Fair Value Gaps (Imbalance)
Identifying an FVG
Three-Candle Pattern:
• Candle 1 and candle 3 don't overlap in range
• The gap between candle 1's wick and candle 3's wick is the imbalance
Why It Forms:
• Aggressive one-directional buying/selling leaves inefficient pricing behind
Common behavior: Price often returns to at least partially fill the gap before continuing
Trading the FVG
Entry Approach:
• Enter on the retrace into the gap, in the direction of the impulse
• Best when the gap aligns with an order block
Stop & Target:
• Stop beyond the gap or the impulse origin
• Target the next liquidity pool or opposing FVG
Caution: Gaps in strong trends may only get partially filled before continuation
⚖️ Risk Management by Concept
🧱 Order Block Entry
Stop: Beyond the block extreme
Target: Next liquidity pool
Confirmation: Rejection candle in the block
Risk/Reward: 1:2 to 1:4
💧 Liquidity Sweep Fade
Stop: Beyond the sweep wick
Target: Opposing liquidity / mean reversion
Confirmation: CHoCH after the sweep
Risk/Reward: 1:2 to 1:5
🔀 BOS Continuation
Stop: Beyond the retracement swing
Target: Next structural high/low
Confirmation: Pullback into OB or FVG
Risk/Reward: 1:2 to 1:4
⚡ FVG Entry
Stop: Beyond the impulse origin
Target: Next imbalance or liquidity pool
Confirmation: Partial fill and rejection
Risk/Reward: 1:2 to 1:3
📋 Quick Institutional Concept Guide
Price retraces to a strong impulse origin
🧱 Look for an Order Block reaction.
Sharp wick through equal highs/lows
💧 That's a Liquidity Sweep — watch for reversal.
First break against the trend
🔀 That's a CHoCH — shift your bias.
Gap between candle 1 and candle 3
⚡ That's a Fair Value Gap — expect a partial fill.
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🔢 Psychological Levels Guide
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