“Internal POIs vs External Inefficiencies: How to Know When Price Will Ignore Your Setup and Seek a Deeper FVG”

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📘 INTRO

One of the most confusing moments in smart money trading happens when you spot a beautiful bullish setup — sweep of a low, a bullish BOS, and a clean POI (order block) in discount — yet price completely ignores it and dives deeper.

Why?

Because not all POIs are equal.📌

Some are internal liquidity (used only for reactions), while others are external draw targets (true swing turning points).
Understanding the difference is a critical skill if you want to stop getting prematurely stopped out and start entering where the real money flows.

This article explains exactly how to do that, using your USDCAD setup as a clear case study.

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🧠 CORE CONCEPT: PRICE IS ATTRACTED TO IMBALANCES & LIQUIDITY FIRST

In bullish conditions, price wants to:

1. Clear sell-side liquidity
2. Rebalance inefficiencies (FVGs)
3. Then deliver the expansion upward

If your POI sits before a major imbalance or sits on internal structure, it will often be taken out before the real reversal begins.

To trade smart money effectively, you must learn to distinguish:

Internal Structure	→ Reaction Zones
External Structure	→ Reversal Zones

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📌 INTERNAL POIs (Weak Zones)

These POIs appear:

• After small internal BOS
• Inside micro ranges
• Above equilibrium
• Before major inefficiencies
• With liquidity resting beneath them

Internal POIs typically produce:

• Scalps
• Weak reactions
• Fake reversals
• Liquidity grabs before deeper moves

You should never treat them as final swing lows unless confirmed by displacement from them.

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📌 EXTERNAL POIs (High-Probability Swing Zones)

These are found:

• Beneath equal lows or major liquidity
• Inside deep discount (62–79%)
• Aligned with unmitigated FVGs
• At the origin of displacement
• Connected to previous higher-timeframe expansion

These zones produce:

• Strong reversals
• Clear BOS on lower timeframes
• Higher probability swing entries
• Sustained movement toward external buy-side targets

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⚡ CASE STUDY: USDCAD

Your setup included:

• Sweep of an internal low
• Reversal BOS
• A POI (order block) sitting above equilibrium
• But a large, untouched bullish FVG deeper in discount on the left

Here’s the decisive logic:

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1. The POI was internal liquidity

Your POI was formed inside a micro range, not at the origin of displacement.

That means:

• It was never intended to reverse price permanently
• It was designed to collect buy-side liquidity (your stop-loss)
• It did not align with external structure

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2. The deeper bullish FVG was the true target

The FVG below your POI was:

• Clean
• Wide
• Fully unmitigated
• Sitting deep in discount
• Directly aligned with a chain of equal lows leading into it

This is what we call external draw on liquidity + inefficiency alignment.

This type of FVG has MUCH higher probability than an OB sitting above equilibrium.

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3. The pullback behavior confirmed the intention

As price moved toward your POI:

• The movement was slow
• Overlapping
• Corrective
• No bullish displacement formed

This means price was simply seeking balance before breaking lower into the true imbalance.

This “slow correction → fast displacement” pattern is a signature that price intends to fill a deeper FVG.

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4. Price delivered straight into the FVG and reacted immediately

Once price hit the FVG:

• Displacement increased
• The lower boundary of the inefficiency began to respond
• Buyers showed interest
• The zone created the real reaction

This confirms the initial POI wasn’t a real turning point.

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🎯 HOW TO APPLY THIS IN FUTURE TRADES

1. Always check for unmitigated FVGs below your POI

If you see a deeper inefficiency:

➡️ Your POI is more likely to fail.

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2. Use equilibrium as a validation filter

Mark the impulse that caused the BOS.

If your POI sits above 50%, and the FVG sits below 50%, the FVG wins 80% of the time.

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3. Identify internal vs external liquidity

Internal liquidity = reaction only
External liquidity = real swing turning points

Always favor external structure.

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4. Observe the speed of pullbacks

• Slow pullback → price wants deeper rebalancing
• Impulsive pullback → POI likely to hold

This is one of the simplest and most reliable tells.

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📌 SUMMARY

In bullish structure, inefficiencies are stronger magnets than internal order blocks.
Your USDCAD setup failed at the POI because it was:

• Internal
• Above equilibrium
• Before a major imbalance
• And lacked strong displacement

The deeper FVG was the true target all along — and price respected it.

This framework will help you confidently judge whether a POI is likely to hold or be taken out on future setups.