💧 LIQUIDITY SWEEP: When Price Hunts Stop Losses

Before a strong move, price often takes liquidity from obvious highs or lows.

This is known as a Liquidity Sweep.

What is a Liquidity Sweep?

A Liquidity Sweep happens when price briefly moves above a previous high or below a previous low, triggering stop-loss orders and breakout entries, then rejects and moves back in the opposite direction.

🔹 Buy-Side Liquidity Sweep

Price moves above previous highs → takes liquidity → rejects → potential bearish move.

🔹 Sell-Side Liquidity Sweep

Price moves below previous lows → takes liquidity → rejects → potential bullish move.

Why does it matter?

✅ Helps identify potential reversals
✅ Shows where liquidity may be resting
✅ Can improve entry timing
✅ Works well with Market Structure, Order Blocks & FVG

Golden Rule

A liquidity sweep is NOT a trade signal by itself.
Wait for rejection + market structure confirmation before entering.

For educational purposes only. Not financial advice.

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