Discussing the article: "From Novice to Expert: Creating a Liquidity Zone Indicator" - page 2
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The most famous example is stop orders behind price extremes. This is an obvious place to put your limit order exactly there and get large volume on other people's stops. There are other, less obvious places.
The chart is a story, yes, but:
1) there are still positions there that will react as price moves to or from them
2) the chart itself serves as a signal for further action, and it does this not in the past, but right now market participants are looking at the price chart and making decisions
Further, you yourself now say that liquidity is somewhere. So it's still an area because there's not enough liquidity elsewhere, right? And this is valuable information that ordinary people who sit at home with laptops and retail trading terminals don't have access to. The more knowledgeable market participants are after the money of the less knowledgeable. This is exactly hunting, because the market does not create money, but only distributes it from one to another.
Now we are really back to square one, when you yourself assert the thesis you were originally arguing.
Want to learn more about creating liquidity? Read about Livermore, who 100 years ago was hyping up stocks to then sell them on the resulting hype. That's what liquidity creation is all about: provoking masses of participants to buy where they should sell and vice versa. Nothing has changed since then. To sell something, you need someone to buy it from you, and to get him to do it at the price you want, you need to convince him that he is making a good deal.
Unless your name is G.P. Morgan and you have access to the non-public information you described, all you have to do is analyse the chart and make a logical assumption about what lies behind it.
People genuinely do look at the same charts and react to the same levels, creating self-fulfilling dynamics. This is real. But it proves something much weaker, it means price levels can attract activity because participants expect them to, not because a large player engineered it or because structural liquidity genuinely resides there in the order book sense.
Again, it are limit orders providing liquidity in the market, not market orders. For a large participant to "place a limit order there and get filled on other people's stops," price first has to reach that extreme. Either the market gets there naturally, in which case no one engineered anything, or someone pushes it there deliberately, which is textbook manipulation and illegal in regulated markets.
The fact that real liquidity information exists but is inaccessible to retail traders does not make chart analysis a valid substitute. The absence of a better tool does not validate an inferior one. That's like saying because you can't afford a thermometer, touching the radiator is a valid way to measure room temperature.
Eleminating self deception is the first step to success. But if you insist, by al means deceive yourself, it does not affect me in any way.