Sweep Entry

Introduction to Sweep Entry

A “Sweep Entry” refers to a price action technique where the market temporarily breaches a significant level of liquidity (like support or resistance) before reversing in the intended direction. This occurs because institutional players often manipulate prices to collect liquidity before making larger moves.

This concept leverages the understanding of liquidity grabs and structure shifts, making it ideal for traders focused on smart money concepts or price action strategies.

Chart Breakdown

1. Key Elements on the Chart:
   • Key Level: A major resistance or support level that attracts attention from retail traders.
   • LQ (Liquidity Zone): An area where stop-losses or pending orders are collected.
   • Shift: A structural change indicating a potential reversal.
   • BOS (Break of Structure): A confirmation that the market is now trending in the opposite direction after the sweep.
2. Sequence of Events:
   • Price initially moves to sweep the LQ (Liquidity Zone).
   • A clear Shift in structure occurs, showing the intention of reversal.
   • The BOS (Break of Structure) confirms the new direction.
   • Price retraces to a favorable entry zone near the shift or BOS for optimal risk-reward entry.

Trade Setup Idea

1. Entry:
   • Wait for the Shift to occur and price to retrace to the entry zone (e.g., near the BOS or an imbalance).
   • Look for a bullish or bearish engulfing candle at this zone to enter.
2. Stop Loss:
   • Place your stop-loss below the LQ (liquidity sweep low) for a buy setup or above the sweep high for a sell setup.
3. Take Profit:
   • Target the next significant structure level or use a multiple of your risk (e.g., 2R or 3R).
4. Confirmation:
   • Use additional confluence factors such as volume, time of day, or alignment with higher timeframes for better accuracy.

This technique is ideal for disciplined traders who understand market dynamics and want to avoid falling victim to liquidity grabs.