If you ever feel like the market 'kicked you out' just before the price moved exactly where you expected, you probably became a victim of a Liquidity Sweep.
It's not a coincidence. It's market mechanics.
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What is a Liquidity Sweep?
A Liquidity Sweep is a targeted price move to levels where concentrated liquidity exists:
retail stop-losses
pending orders (buy stop / sell stop)
liquidation prices of leveraged positions
These levels are fuel for large players. Without liquidity, they cannot open or close large positions.
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Where does liquidity most often hide?
above the previous high (stop-losses of shorts)
below the previous low (stop-losses of longs)
round numbers (50k, 60k, 100k…)
clear trend lines
consolidation highs and lows
Where 'it shouldn't happen'.
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What does Liquidity Sweep look like in practice?
1. The price is approaching a clear level
2. Everyone is waiting for a breakout
3. The price quickly breaks through the level
4. Stop-losses and liquidations are activated
5. Volume explodes
6. The price immediately returns back
And retail stays out. Or on the wrong side.
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Why does it 'hurt' mainly retail?
Because retail:
enters too early
has tight stop-losses
trades 'textbook' levels
reacts emotionally
Smart money doesn't trade direction.
They trade liquidity.
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Liquidity Sweep ≠ real breakout
This is key to understand:
Breakout = continuation + acceptance above the level
Liquidity sweep = quick spike + immediate rejection
You can tell the difference by:
candles (long wicks)
price returning back to range
volume without continuation
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How to avoid getting caught?
Don't trade the first touch of the level
Wait for the reaction after the sweep
Watch for price returning to range
Look for confirmation, not a 'feeling'
The best trades often occur only after the market punishes someone.
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Summary
The market is not fair, but it is logical.
Liquidity Sweep is not against you personally — it is against crowd behavior.
Once you understand that:
> price moves where there is liquidity
you will stop being hunted…
and you start to understand why the market moves the way it does.