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🔹 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

🔄 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

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lsr.1743916346.txt.gz · Last modified: 2025/04/06 05:12 by lwattsii