Liquidity Sweep
A sharp move beyond an obvious level that triggers clustered stops before reversing.
Also called: stop hunt · stop run · liquidity grab
In plain language
Stops cluster just beyond obvious highs and lows. Those resting orders are, collectively, a pool of liquidity — guaranteed counterparties at a known price.
A sweep pushes into that pool, triggers the stops, uses the resulting flow to fill large orders, and then reverses. The break looks decisive and lasts minutes.
It rarely requires a conspiracy. It is a structural consequence of everyone placing stops in the same predictable place.
Why it matters
Understanding sweeps changes where you put stops: beyond the obvious level with a volatility-based buffer rather than exactly at the round number everyone else uses.
Common mistakes
- Placing stops a few cents beyond the most obvious high or low on the chart.
- Treating every sweep as a reversal signal without waiting for price to reclaim the level.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
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