Liquidity Sweep Candle Stick Pattern: A Practical Trading Guide

The liquidity sweep is one of those patterns smart traders watch for. It's when price shoots beyond a recent level—often a swing high or low—before reversing hard in the opposite direction. On the candlestick chart, you'll spot it as a wick that extends beyond key support or resistance, then closes back inside the trading range.

Why does this matter? Simple. Institutions and large players hunt stop losses. They push price beyond obvious levels to trigger retail positions, then the real move happens. That's the sweep.

How to trade it:

1. Identify recent swing highs or lows on your timeframe
2. Watch for candles with extended wicks beyond these levels
3. Confirm reversal signals (engulfing patterns, pin bars, or momentum shifts)
4. Enter on the pullback or the next candle formation
5. Set stops beyond the sweep high/low

The pattern works across multiple timeframes—hourly, 4-hour, daily. Bitcoin, Ethereum, altcoins, futures, spot trading—liquidity sweeps happen everywhere.

Key tip: Don't chase immediately after the sweep. Wait for confirmation. A second candle that reverses or holds above/below the sweep level gives you better odds. Patience beats speed in crypto trading.