Description
Liquidity sweep explained: A move through an obvious high or low only becomes a failed breakout if price returns back inside the previous range. Above a high, a liquidity sweep often appears as an upward push followed by rejection. Below a low, it can look like a sharp drop followed by a recovery. In this FXStreet video, Ian Coleman details how to read these liquidity grabs and stop hunts without mistaking normal breakout testing for confirmed failure.
Most traders call any move beyond a level a liquidity sweep, but terminology varies. The key is evidence. A breakout fails when price closes back inside the range, not merely when it wicks through buy-side liquidity above a high or sell-side liquidity below a low. Ian explains why moving through a level does not prove failure and what confirmation signals separate a true reversal from a routine sweep of resting orders.
Understanding liquidity sweeps improves entry timing, stop placement, and breakout trading decisions across forex, indices, and commodities. Instead of chasing the initial thrust, wait for the rejection or recovery that shows the sweep is complete. This price action concept helps you avoid false breakouts and align with institutional order flow.
If you trade breakouts, this liquidity sweep breakdown gives you a clear framework for reading failed breakouts and range returns. Watch for the moment price moves back inside the previous high-low structure.
Liquidity Sweep Explained by Ian Coleman | FXStreet
Do you wait for a close back inside the range before calling it a sweep?
#LiquiditySweep #BreakoutTrading #ForexAnalysis