Buyside and sellside liquidity
Buyside liquidity is often discussed above visible highs, where buy-stop orders and short stop-losses may sit. Sellside liquidity is often discussed below visible lows, where sell-stops and long stop-losses may sit.
What is a liquidity sweep?
A liquidity sweep occurs when price trades beyond an obvious level and then rejects or rapidly returns. A sweep can precede a reversal, but it can also be the first stage of a genuine breakout.
Sweep vs breakout
SweepPrice probes beyond a level but fails to sustain acceptance.
BreakoutPrice breaks the level and maintains acceptance or follow-through beyond it.
Context checklist
- Was the level obvious and repeatedly tested?
- Did volatility expand at the break?
- Was there displacement away from the level?
- Did price close back inside the range?
- Does higher-timeframe structure support the reaction?