The Tradeskill
LiquidityIntermediate

Draw on Liquidity (DOL)

What draw on liquidity (DOL) means, how to choose the most likely untaken liquidity pool as a target, and how it combines with premium and discount.

Library categories

What it means

Draw on liquidity is the liquidity pool price is most likely moving toward next: an untaken high, equal highs, previous day high, or the lows on the other side.

It is a target-selection idea, not an entry signal.

Why traders use it

If price tends to move from one pool to the next, the nearest obvious untaken pool in the direction of the bias is a reasonable target. Knowing the draw also tells you when to stop expecting more.

ICT-style analysis usually picks the draw on a higher timeframe and looks for entries on a lower one.

Chart examples

Bullish draw on liquidity

Reaction in discountDrawn to the poolReachedDraw on liquidity
From a reaction low in discount, price travels to the untaken high above.

Bearish draw on liquidity

Reaction in premiumDrawn to the poolDraw on liquidity
From a reaction high in premium, price travels toward the untaken low.Schematic diagrams drawn to explain the idea; they are not market data.

How to identify it objectively

  • 1Decide the bias from higher-timeframe structure.
  • 2List untaken pools in that direction (swing highs, EQH, PDH, PWH).
  • 3The nearest obvious one is the first draw; the next one is the extension.
  • 4Once taken, choose the next draw or stand aside.

Bullish use

  • 1Bias bullish; untaken BSL above.
  • 2Price reacts in discount (lower half of the range).
  • 3Target the BSL above.

Bearish use

  • 1Bias bearish; untaken SSL below.
  • 2Price reacts in premium (upper half).
  • 3Target the SSL below.

What confirms it

  • The pool is clearly untaken and obvious.
  • Price reacts from the opposite side of the range.

What invalidates it

  • The pool is taken and price reverses: the draw is complete.
  • Structure flips against the bias.

How a hypothetical setup is built

Entry

Enter in discount after a bullish reaction.

Stop

Below the reaction low.

Target

The draw on liquidity above.

A hypothetical illustration of how the concept is turned into a plan, not a recommendation. Practise it on a paper account first.

Related concepts

Historical testing

Not tested on The Tradeskill. Testing needs a written rule for which pool is "the" draw.

Limitations: when it fails

  • More than one pool can look like the draw.
  • Price may never reach it.
  • Hindsight makes the draw look obvious.

Knowledge check

Pick an answer to see the explanation. Nothing is saved.

Draw on liquidity is mainly used for…

1. Draw on liquidity is mainly used for…

After the draw is taken, what next?

2. After the draw is taken, what next?

In a bullish bias, where do traders look for entries relative to the range?

3. In a bullish bias, where do traders look for entries relative to the range?

Practise it risk-free

Open the free chart, use replay to go back in time and look for this concept candle by candle with $20,000 in virtual money.