Liquidity Voids and Price Magnets: Why Markets Snap Back Into Gaps
A liquidity void is a price area where the market barely traded. It’s a thin, low-volume pocket created when price moves too fast for meaningful two-way activity. These voids act like magnets—price often returns to fill them because the auction wants to rebalance what it skipped over.
What Creates a Liquidity Void?
When buyers or sellers overwhelm the book, the market can rip through multiple price levels without trading much at each one. The result is a vertical, impulsive move with almost no rotation or absorption.
Typical causes include:
- a news spike or scheduled release
- stop cascades dumping multiple levels instantly
- thin liquidity during off-hours sessions
- large players sweeping the book
You saw how this ties into market liquidity earlier. When the book is thin, the market leaves gaps behind.
How Liquidity Voids Look on the Chart
You don’t need special indicators. Liquidity voids are obvious:
- vertical candles with little to no overlap
- almost no wicks on either side
- price leaves a “hole” of untested levels
These are the parts of the chart that look like the market teleported upward or downward instead of actually trading there.
Why Liquidity Voids Pull Price Back
A liquidity void is an unfinished auction. The market skipped prices where real two-way trading should’ve happened. It tends to come back because the auction wants balance:
- traders trapped in the move want out
- countertrend players reload at better prices
- institutional players rebalance positions
- new participants step in where volume is missing
This is the same logic behind inefficient price action. What’s rushed usually gets repaired later.
How Price Fills a Liquidity Void
Filling a void is not mysterious. Price returns into the gap and:
- starts trading two-way again
- absorbs trapped orders
- tests levels that were skipped
- rebuilds normal volume
Once the gap is filled, the market often continues in the original direction—but not always. Sometimes the fill is the end of the move.
The Three Types of Liquidity Voids
1. News Voids
Instant spikes. Often filled later the same day after volatility cools.
2. Thin-Session Voids
Created during low liquidity hours (overnight Globex). These fill frequently during regular trading hours when real volume appears.
3. Stop-Run Voids
Triggered by cascading stops. These often fill only partially before resuming trend.
When Voids Don’t Get Filled
Nothing in markets is 100%. Voids sometimes stay open for days or weeks. This usually happens when:
- the trend is extremely strong
- new fundamental information reprices the entire market
- liquidity vanishes, forcing the market to accept higher or lower prices
But even then, most voids eventually see price return—just not immediately.
How to Use Liquidity Voids in Your Trading
1. Don’t Chase Moves That Created the Void
If price ripped vertically, buying right after is usually the worst possible timing.
2. Look for Pullback Entries Into the Void
Let the market correct back into the gap. Enter at the edges where trapped players are still active.
3. Don’t Blindly Fade Voids
The market fills voids on its own schedule—not yours. Fading just because “a gap exists” is how traders blow accounts.
The Bottom Line
Liquidity voids show you where the market moved too fast to form a proper auction. Those skipped areas act like price magnets, pulling price back to restore balance. If you respect these gaps instead of trading inside the chaos that created them, you avoid the dumbest entries and catch cleaner moves.