TradingAdvanced#Price Action#SMC
Liquidity Sweep
L
Definition
A sharp price movement used to trigger stop losses before reversing, generating the liquidity needed for large institutional positions.
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Concept Diagram
Key Takeaways
1
Liquidity Sweeps occur when price deliberately pushes beyond key levels to trigger stop-loss clusters.
2
Once stops are triggered (creating volume), price reverses in the intended direction — a classic 'stop hunt'.
3
These sweeps are most visible around previous highs/lows, equal highs/lows, and obvious support/resistance.
4
Identifying sweeps in real-time is one of the most profitable skills in Smart Money trading.
Practical Example
BTC has strong support at $60k with millions in stop-losses below. Price wicks to $59,800 triggering all stops, then immediately reverses and rallies to $63k. The sweep 'fuelled' the rally with forced selling volume.
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Related Terms
Trading
FVG (Fair Value Gap)An imbalance in price move shown by a gap between candles, often filled as price seeks to rebalance liquidity.
Strategy
Smart Money FlowTracking the moves of institutional traders and venture funds on-chain to identify early accumulation phases.
Market Structure
Liquidity GrabA engineered move to trigger stop losses above/below obvious levels to fill institutional buy/sell orders.
Market Structure
Order Block (OB)The last candle in the opposite direction before a strong directional expansion, marking institutional entry points.
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