A liquidity sweep happens when price pushes beyond an obvious high or low to trigger the orders accumulated there — and then reverses. It is a stop hunt, and it is the event that precedes most institutional moves. Understanding it completely changes where you place your entries and your stops.
Why price hunts stops
Retail traders place stops in obvious spots: just below the last low, just above the last high, at equal highs/lows. Those stops are liquidity — orders waiting to be filled. Institutions need that liquidity to fill large positions. So price goes for it: it sweeps the level, triggers the stops, and then moves in the real direction.
How to identify a sweep
- Equal highs/lows (EQH/EQL). Two or more touches of the same level accumulate stops. The sweep crosses them and reverses.
- Swing highs/lows. Price breaks a relevant high/low and quickly returns below/above — a false breakout.
- Long wick. A sweep usually leaves a pronounced wick: price touched the level but did not close beyond it.
The entry strategy
- Identify the target liquidity pool (EQH/EQL, session highs/lows).
- Wait for the sweep of that level.
- Confirm a change of structure (ChoCH) on a lower timeframe after the sweep.
- Enter in the direction of the new bias, with a stop on the other side of the sweep wick.
This sequence — sweep → ChoCH → entry on an FVG/OB — is among the highest-probability setups in SMC. The sweep gives you timing; structure gives you confirmation.
Detect sweeps in real time
Our Liquidity Sweeps indicator marks them instantly with alerts — free on TradingView. Or let Master of Liquidity EA trade them on its own on MT5.
Related: what are Order Blocks · what is a Fair Value Gap.
Educational content. Does not guarantee profitability. Trading involves risk of capital loss.