Liquidity sweep
Also called stop hunt, liquidity grab, raid. What it means, how it looks on a gold (XAUUSD) chart, and the mistake most traders make with it.
Liquidity sweep: A liquidity sweep is a quick move beyond a high or low that triggers the stops resting there, followed by a fast return inside the range. It often marks the turning point of a move.
Liquidity sweep on a gold chart
Gold has equal lows at $4,110. At the London open it drops to $4,104, takes the stops, and the 15-minute candle closes back at $4,114. That wick below $4,110 is the sweep; a market structure shift afterwards sets up a long.
How traders use it
Traders wait for the sweep, then a lower-timeframe shift in the other direction, and enter on the fair value gap the shift leaves, with the stop beyond the sweep's extreme.
Common mistake
Entering on the sweep candle itself. Without the shift that follows, a sweep can turn into a real breakout.
Questions
What does liquidity sweep mean in trading?
A liquidity sweep is a quick move beyond a high or low that triggers the stops resting there, followed by a fast return inside the range. It often marks the turning point of a move.
How is liquidity sweep used on gold (XAUUSD)?
Traders wait for the sweep, then a lower-timeframe shift in the other direction, and enter on the fair value gap the shift leaves, with the stop beyond the sweep's extreme.
Educational content, not financial advice. Every concept here is a probability, not a guarantee.
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