Trading glossary

Liquidity sweep: meaning in trading

A liquidity sweep is a quick move through an obvious high or low that takes the stops there and then reverses.

Price pokes beyond a level, sets off the stop orders resting there, then closes straight back inside. It is a raid on the stops, not a real breakout.

Sweep or breakout?

• Sweep: a wick through the level and a quick close back inside.
• Breakout: candles close beyond the level and stay there.

A sweep alone is not an entry. We wait for a change of character back the other way, then the pullback.

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