Wick Sweeps vs Body Closes
Do you classify a wick above structure as a liquidity sweep or a genuine breakout?
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A wick above structure is typically classified as a liquidity sweep rather than a genuine breakout, especially if price quickly rejects and reverses back inside the range. A genuine breakout is usually confirmed by a strong body close beyond the structural level, showing sustained commitment from buyers or sellers.
In prop firm trading, distinguishing between these two is critical for managing risk. Acting on a false breakout (a wick sweep) without confirmation can lead to premature entries, unexpected drawdown, and quick breaches of your daily loss limits. Always wait for proper candle closure or retest confirmation to protect your capital.
How do you usually trade these setups? Let us know in the replies!
