IRL & ERL: Internal Range vs External Range Liquidity

One of the core tenets of IPDA is price always moving from one type of liquidity to another. IRL and ERL are two "destinations" that the algorithm targets on a rotating basis, and understanding this rotation is key to price forecasting.

1. Detailed Definition

🔵 IRL — Internal Range Liquidity

Liquidity inside a swing zone (located between the nearest top and bottom). IRL includes:

Regions FVG (Fair Value Gap) not yet filled.
The OB (Order Block) has not been retested.
The Volume Imbalance inside the wave rhythm.
Point Equilibrium (50%) of the current wave rhythm.

🔴 ERL — External Range Liquidity

Liquidity outside Swing zone boundaries — located at larger Swing tops/bottoms. ERL includes:

The BSL (Buy-side Liquidity) on the old top.
The SSL (Sell-side Liquidity) old bottom.
The Equal Highs/Equal Lows big.
Top/bottom monthly, weekly, daily before.

IPDA cycle: ERL → IRL → ERL (price goes from the big top to the inside FVG and then goes again)

2. IRL ↔ ERL Rotation Principle

The IPDA algorithm always operates in a predictable cycle:

Price is at ERL (outer major top or bottom). Next it will return IRL (inner FVG/OB areas for rebalance).
After filling IRL, the price is headed again ERL Next (external larger top/bottom) for liquidity sweep.
The ERL → IRL → ERL → IRL cycle repeats continuously in every time frame.

🎯 Application:

When the price has just finished scanning an ERL (big top/bottom), look for IRL zones (nearest FVG/OB in the opposite direction) to place Take Profit or find entry points in the opposite trend.

Trade disciplined and trade well! If you have any questions about this lesson, join our Telegram community to discuss.

← View more lessons