// Definition
A liquidity sweep is when price briefly pushes beyond an obvious high or low to trigger the stop-losses there, then quickly reverses.
Explained simply
Price spikes just past a swing high or low, takes out the stops clustered there, and then closes back inside. On the chart it usually leaves a long wick beyond the level.
A sweep often marks the end of a move rather than a breakout, because the orders needed to fuel the reversal have just been collected.
Tip
The difference between a sweep and a real breakout is the close: a sweep closes back inside the level, a breakout closes beyond it.
A full video lesson on this topic is coming soon to TradingGain Academy.
For education only, not financial advice. Trading is risky and you can lose money.