A liquidity sweep is one of the cleanest tells in price action, and most traders miss it because they're watching the close instead of the wick.
Here's the anatomy:
1. A swing high or low forms. Stops build up on the other side of it - buy stops above the high, sell stops below the low.
2. Price pushes past that level. The wick takes out the stops.
3. Price closes back inside the range.
That third step is the whole thing. If price breaks a level and closes beyond it, that's a breakout. If it breaks the level and closes back inside, the move was about collecting liquidity, not about direction.
On this chart you can see it marked: the level gets swept, price reverses, and the move that follows runs in the opposite direction of the "breakout."
What this doesn't tell you: where to enter, where your stop goes, or whether the reversal holds. A sweep is context, not a signal. It tells you what just happened to the order flow - the trade plan is still on you.
Worth noting: the more obvious the level, the more stops sit behind it. Equal highs, round numbers, and previous day's high/low are the levels that get swept most often.
Here's the anatomy:
1. A swing high or low forms. Stops build up on the other side of it - buy stops above the high, sell stops below the low.
2. Price pushes past that level. The wick takes out the stops.
3. Price closes back inside the range.
That third step is the whole thing. If price breaks a level and closes beyond it, that's a breakout. If it breaks the level and closes back inside, the move was about collecting liquidity, not about direction.
On this chart you can see it marked: the level gets swept, price reverses, and the move that follows runs in the opposite direction of the "breakout."
What this doesn't tell you: where to enter, where your stop goes, or whether the reversal holds. A sweep is context, not a signal. It tells you what just happened to the order flow - the trade plan is still on you.
Worth noting: the more obvious the level, the more stops sit behind it. Equal highs, round numbers, and previous day's high/low are the levels that get swept most often.
Pine Script developer & trader. I build clean indicators - Smart Money Concepts, scanners, risk tools. ITAtradingtools.com
Pernyataan Penyangkalan
Informasi dan publikasi ini tidak dimaksudkan, dan bukan merupakan, saran atau rekomendasi keuangan, investasi, trading, atau jenis lainnya yang diberikan atau didukung oleh TradingView. Baca selengkapnya di Ketentuan Penggunaan.
Pine Script developer & trader. I build clean indicators - Smart Money Concepts, scanners, risk tools. ITAtradingtools.com
Pernyataan Penyangkalan
Informasi dan publikasi ini tidak dimaksudkan, dan bukan merupakan, saran atau rekomendasi keuangan, investasi, trading, atau jenis lainnya yang diberikan atau didukung oleh TradingView. Baca selengkapnya di Ketentuan Penggunaan.