Trading Strategies
Liquidity Sweep
A quick run through an obvious level (prior high, equal lows) that triggers resting stops, then reverses. Traders position for the reversal after the sweep.
In plain English
Stops cluster beyond obvious levels, and a sweep is the market collecting them: price spikes through the level, fills the resting orders, and snaps back once that liquidity is consumed. The pattern is also called a stop hunt or raid.
Sweep traders wait for the pierce-and-reclaim rather than the touch: entry comes when price closes back inside, stop goes beyond the sweep extreme. It pairs naturally with session landmarks like the overnight high and low, which are the most harvested pools in index futures.
- ES dips 3 points under the overnight low, pauses, and reclaims it within two minutes.
- A trader buys the reclaim with a stop under the sweep low, targeting the range midpoint.