Trading
Liquidity Sweep
Price briefly moving past a key level to take liquidity before reversing.
Full Definition
A liquidity sweep is when price temporarily breaks through a significant level where orders are resting, collecting that liquidity, before reversing back in the original direction. Sweeps are key concepts in smart money trading and often mark the end of one move and the beginning of another. They typically show up as wicks or brief spikes beyond key highs/lows.
Example
Price sweeps above yesterday's high by 5 pips, triggering buy orders and stopping out shorts, then reverses to close well below that high. This sweep provided the fuel for the subsequent down move.
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