• 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

• Wick above/below previous swing
• Engulfing candle or reversal pattern
• High volume on sweep, fade into reversal
• Price reclaims range or OB zone

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

• 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

• 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

• Reveals manipulation and intent
• Ideal for countertrend trades or early trend reversals
• Helps you avoid getting trapped in false breakouts

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.

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