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--- lsr [2025/04/06 04:09] – created lwattsii
+++ lsr [2025/04/06 05:55] (current) – [🔹 Strategy 3: Liquidity Sweep Reversal] lwattsii
@@ Line 1: / Line 1: @@
+[[https://www.xpressnets.com/wiki/doku.php?id=gptplaybook|Back]]
+===== 🔹 Strategy 3: Liquidity Sweep Reversal =====
+  * **Setup**: Price makes a wick above previous high (or below low), then closes back inside
+  * **Trigger**: Failed breakout (stop run)
+  * **Entry**: Enter on engulfing candle or OB confirmation
+  * **Stop Loss**: Wick high/low
+  * **Take Profit**: Mean reversion to VWAP or OB zone
+{{ :liquiditysweep.jpg?400 |}}
+=== 🧪 LSR Quick Checklist ===
+  * Wick above/below previous swing
+  * Engulfing candle or reversal pattern
+  * High volume on sweep, fade into reversal
+  * Price reclaims range or OB zone
+===== 🔄 What is a Liquidity Sweep Reversal? =====
+A **Liquidity Sweep Reversal** occurs when **smart money** (large players) intentionally triggers stop orders near recent highs or lows to:
+  * Trap retail traders
+  * Fill large positions
+  * Reverse the price direction shortly after
+==== 🧠 What It Tells You ====
+  * The initial breakout is **fake** – it’s a **liquidity grab**
+  * Price **wicks above a recent high** (or below a low), but **fails to hold**
+  * The real move happens **in the opposite direction**
+==== 📉 How to Spot It ====
+  * Price makes a **wick above a previous high** or **below a low**
+  * Closes back **inside the range** (false breakout)
+  * Watch for a **reversal candle** (engulfing or OB confirmation)
+  * Volume often **spikes during the sweep**, then **fades into the reversal**
+==== ✅ Why It’s Powerful ====
+  * Reveals **manipulation and intent**
+  * Ideal for **countertrend trades** or early **trend reversals**
+  * Helps you **avoid getting trapped** in false breakouts
+=== 🚫 Liquidity Sweep (No Pullback) ===
+**Example:**
+  * **Price spikes above the previous day’s high with a long upper wick**, trapping breakout traders.
+  * **It then drops immediately, closing back inside the range on heavy sell volume**.
+  * **Trade Entry:** Short on the first bearish engulfing candle after the wick.
+  * **Stop Loss:** Above the sweep wick.
+  * **Target:** Mid-range or VWAP.
+**Why it worked:** Classic stop run followed by a fast reversal—no pullback needed.
 [[https://www.xpressnets.com/wiki/doku.php?id=gptplaybook|Back]]