Liquidity sweep

Definition

Liquidity sweep in plain English

Lots of traders leave "stop" orders — automatic exit instructions that fire if price hits a certain level to cap their losses. A liquidity sweep is when price stabs sharply into a cluster of those stops, triggering them all at once, which forces a rush of orders that shoves price even further in a quick chain reaction. The key insight: this spike isn't real buyers or sellers who believe in the move — it's just machinery tripping over itself. That's why a sweep usually snaps back fast once the stops are exhausted, leaving a sharp "fakeout" wick behind.

Learn these first

• Break-even stop
• True Range (TR)

Related Volume Profile Analysis terms

• Ask
• ATR (Average True Range)
• Auction Market Theory
• Below value
• Bid
• Break-even stop
• Buying tail
• Day type
• Excess
• Excess high / Excess low