Equal Lows (EQLs) Explained
An Equal Low (EQL) is a trading concept used by price action traders (also known as SMC or ICT traders). An EQL is a bullish indication used to confirm a trend reversal or area of consolidation in the market.
How to Identify an Equal Low (EQL)
An Equal Low is found by identifying a swing low, which price later retests and rejects.
Trading Using an Equal Low (EQL)
Equal Lows are not used as entry and exit points; instead, they are used as confirmation that the current market trend will reverse. This means that when an EQL is formed on a chart, traders can adapt a bullish bias and look for only long entries.
Common Strategy Using Equal Lows (EQL)
Equal Lows (EQLs) are used in strategies with other price action formations. A common strategy is using an Equal Low (EQL) with . An Equal Low indicates a shift in the market trend, from bearish to bullish, which allows traders to look for long entries. A retest of a bullish Fair Value Gap (FVG) can be used as an entry point after having a trend bias confirmation. A trader will exit their position when key levels of interest are reached such as a bearish order block, level of resistance, or sell side liquidity.
What is the best timeframe for using Equal Lows?
The ideal timeframe for using Equal Lows depends on the trader's style; day traders might prefer shorter timeframes like 1 to 15 minutes, while swing traders may find hourly or daily charts more beneficial. Longer time frames tend to offer more reliable signals by reducing market noise.
What is a common mistake when trading Equal Lows (EQLs)?
A common mistake traders fall victim to with Equal Lows, is not using other forms of confluence to enter their trade. Traders should build strategies around systems with certain conditions to increase their winning probabilities; entering long in the market based on one bullish indication can lead to losses.
How accurate are Equal Lows (EQLs) when predicting future price movements?
Equal Lows are reliable indications of support and market reversals, but are best when used with other forms of confluence such as bullish Fair Value Gaps, bullish Order Blocks, Demand Zones, etc.