The Importance of Liquidity Sweeps in Order Flow

A liquidity sweep occurs when price moves through an area where stop orders or other liquidity may be concentrated.

But the most important part is what happens next.

- Does price continue beyond the level?

- Does aggressive participation increase?

- Does price quickly reverse?

- Does the market accept or reject the new price?

A sweep alone doesn't confirm a reversal. The subsequent order flow and price behaviour provide additional evidence.

Don't trade the sweep blindly. Study the reaction after it.

Do you wait for order flow confirmation after a liquidity sweep?