Key idea
Obvious highs and lows (recent swing points, round numbers, prior day's high/low) accumulate resting orders — stops and breakout entries. A liquidity sweep is a fast run through that level to clear those orders, immediately followed by a decisive reclaim back the other way, which can mark a high-quality reversal point.
How to apply it
- Identify obvious, well-known levels where resting orders are likely to cluster (prior day high/low, round numbers, recent swing extremes).
- Watch for a fast, often wick-heavy push through the level rather than a slow grind.
- Require a decisive reclaim back across the level shortly after the sweep — this is the confirmation, not the sweep itself.
- Set invalidation beyond the sweep's extreme; if price returns there and holds, the reversal thesis is wrong.
Confirmation and trade planning
Entry triggerA confirmed reclaim back across the swept level, not the sweep itself
Stop placementBeyond the sweep’s extreme wick
Target frameworkThe opposite structural level, or a measured move from the sweep
Best useIntraday · Swing
Aggressive versus conservative approach
| Aggressive | Conservative |
|---|
| Trigger | Enter on the reclaim candle itself | Wait for a second candle closing further in the reclaim direction |
| Trade-off | Higher risk if the reclaim is itself a false signal | Later entry, tighter reward-to-risk |
Targets are planning references, not forecasts. Position size should be derived from defined account risk and the actual invalidation distance.
Example
Price grinds sideways near the prior day's low for an hour, then spikes below it on a sharp wick before immediately reversing and closing back above the level within the same or next candle — that sweep-and-reclaim is the setup, not the initial spike down.
Checklist
- The level was an obvious, well-known reference point
- The move through the level was fast and wick-heavy, not a slow grind
- There was a decisive reclaim back across the level shortly after
- My invalidation sits beyond the sweep's extreme
Common mistakes
- Entering on the sweep itself before any reclaim confirmation
- Treating a slow grind through a level as a liquidity sweep
- Using obscure levels that don't actually attract meaningful resting orders
- Ignoring invalidation if the level is retested and holds against you