Master The Art Of Liquidity Sweeps
Liquidity sweeps occur when price moves beyond important highs or lows, potentially triggering stop orders before reversing or continuing direction.
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A liquidity sweep happens when price pushes past an obvious high or low, taking out resting stop-loss orders before quickly reversing or continuing in the breakout direction. When trading with a prop firm, understanding these sweeps is vital because chasing breakouts without waiting for confirmation can easily trigger your daily loss limit or breach strict drawdown rules. Many traders look for a failed auction or a sharp rejection candle right after the sweep to manage risk properly. How do you usually trade these zones? Feel free to share your setups below!
