Floor 2: Liquidity
What is a liquidity sweep (stop hunt)?
A liquidity sweep is a candle whose wick trades beyond a pool of resting stops, such as an old high or equal lows. If the candle closes back at or inside the level, it is a raid, often called a stop hunt. If it closes beyond the level, it is a break. The close decides which.
How to spot it
Every obvious high and low is assumed to have stops resting just beyond it; that is what SMC means by liquidity. A sweep is the moment price reaches them. The candle trades through the level, the stops trigger, and for a few moments there is a burst of orders on one side.
What happens next is the whole question. In a raid, the burst is absorbed. Price cannot hold beyond the level, the candle closes back at or inside it, and a long wick is left sticking out. SMC traders read this as the stops having been used as fuel for a move the other way, and this is what most people mean by a stop hunt. In a break, the candle closes beyond the level and price keeps going: the orders that triggered were on the right side.
Both begin identically. Until the candle closes, a raid and a break are the same picture, which is why the skill is patience rather than pattern recognition. The second thing to check is which level was taken: a sweep only means something if there was a real pool there, a confirmed swing, equal highs or lows, or a session extreme.
The rule ForexLens uses
The rule ForexLens uses: a sweep is the first candle whose wick trades beyond a liquidity pool. It is a raid if that candle closes back at or inside the level, and a break if it closes beyond the level. A wick that only touches the level without trading beyond it has not swept anything.
Step by step
- Identify the pool first: a swing high or low, equal highs or lows, or a session high or low that no wick has traded beyond.
- Wait for a candle to trade beyond the level. Its extreme must exceed the pool price, not merely touch it.
- Do nothing until that candle closes.
- Compare the close with the level. At or back inside: a raid. Beyond: a break.
- For a raid, note the wick extreme. SMC traders treat it as the point that must hold for a reversal reading to stay valid.
Sweep, stop hunt, liquidity grab, raid: the names
These terms overlap almost completely. Liquidity sweep and liquidity grab describe the event neutrally: price took the orders beyond a level. Stop hunt adds a claim about intent, that someone pushed price there on purpose to trigger stops. Raid is used on this site for the specific outcome where the candle closes back inside. Some traders also say "turtle soup" for a failed breakout of an old high or low, an older name for a very similar picture.
ForexLens prefers "sweep" for the event and "raid" or "break" for the outcome, because those words can be checked on a chart. Intent cannot.
What SMC traders look for after a raid
- A change of character: a close beyond the nearest swing on the other side, showing the reversal has some force.
- Displacement away from the swept level, ideally leaving a fair value gap.
- A target at the opposing pool, the draw on liquidity.
- Timing: raids at a session open are given their own name, the Judas swing.
Worked example
The simulated chart below shows price returning to a resting pool. Find the pool before you open the Lens and note its price. Then look at the candle that takes it and separate two facts: the extreme of the wick, and the close.
The Lens marks the pool with a dashed line that ends at the sweeping candle, puts a cross at the wick extreme and labels the outcome. The generated walk-through gives the level, the extreme and the close, so you can see how many pips beyond the level price traded and which side of it the candle finished on.
EUR/USD, 15-minute candles, simulated
Reading the chart, step by step
- The pool: buy-side liquidity above a swing high at 1.06432 (candle 6).
- Candle 13 trades to 1.06532, 10 pips beyond the level. That is the sweep: the first candle whose wick goes through the pool.
- It closes at 1.06402, back below 1.06432. A wick beyond and a close back inside is a raid, not a break.
These numbers come from the generated chart above. Change the seed and the prices change; the rule does not.
Takeaway: A sweep is a wick beyond a pool; the candle close, and nothing else, sorts it into a raid or a break.
Common mistakes
- Deciding before the close. Fading every poke through a high means selling into genuine breakouts. The candle has to finish before there is an outcome to trade on.
- Seeing a sweep where there was no pool. A wick through a random candle high is just a wick. The level has to be a real pool: a confirmed swing, equal highs or lows, or a session extreme.
- Treating every raid as a reversal. A raid shows that one candle failed to hold beyond a level. Price often comes back and breaks the same level properly a few candles later.
- Putting the stop back in the same place. After a raid on a low, the new obvious stop location is just under the raid wick. That is a fresh pool. See risk and position sizing for sizing a wider stop.
Does it work? An honest note
The pattern is real and well known outside SMC. Failed breakouts, where price exceeds an obvious level, triggers stops and reverses, have been described by traders for decades. Stops do cluster just beyond widely watched levels (the published evidence is for round numbers), and when they trigger together they can push price further beyond a level for a while.
The contested part is the explanation. "Stop hunt" implies someone did it on purpose. In a decentralised market with many dealers, a spike through a level is usually explained more simply: stops trigger in a cascade, liquidity is thin at that moment, and once the forced orders are done there is nobody left to push. The chart looks the same either way, and a retail trader cannot tell the two stories apart from candles. Our page on FX dealers goes into what is actually documented.
The practical problem is that raids are only obvious afterwards. In real time, a raid and a break are indistinguishable until the close, and even then a raid candle says nothing certain about the next one. There is no independent evidence that trading sweeps is profitable after costs. More in does SMC work? Most retail traders lose money.
Questions people ask
What is the difference between a liquidity sweep and a stop hunt?
They describe the same event from two angles. A liquidity sweep is the neutral description: price traded beyond a level where stops were resting. A stop hunt adds the claim that it was done deliberately. On a chart they are identical, and intent cannot be read from candles, so many traders prefer the word sweep.
How do you tell a liquidity sweep from a real breakout?
By the close of the candle that goes through the level. If it closes back at or inside the level, leaving a wick beyond it, that is a raid. If it closes beyond the level, that is a break. You cannot tell while the candle is still forming, and even a confirmed raid can be followed by a real break later.
What is a liquidity grab?
Another name for a liquidity sweep: a quick move beyond an obvious high or low that triggers the stop orders resting there, usually followed by a move back. Some traders use "grab" for a single-candle wick and "sweep" for a move that takes several levels in a row, but the terms are used interchangeably.
Do brokers or banks hunt stops?
There are documented cases of misconduct in currency markets, and dealers do know where some client stops are. But most spikes through obvious levels need no villain: stops clustered in one place trigger each other when price gets close, especially in thin trading. From a chart you cannot tell which it was. Placing stops away from the most obvious level is a sensible response either way.
Where should a stop go to avoid being swept?
No location is safe, and a stop that is never hit is too far away to be useful. SMC traders try to put stops beyond the level that would actually invalidate the idea, such as the extreme of a raid wick, rather than a pip beyond the nearest obvious high or low, and reduce position size to keep the money at risk the same.
Practise it
Reading about a rule is not the same as applying it. These games generate a fresh chart each round, ask you to find it first, and grade you against the same rule.
Sweep or Break
Price pokes through a level, candle by candle. Raid and reverse, or a real break? Decide before the close.
The Liquidity EngineerBoss
Boss. Five rounds against a market maker hunting your stops. Survive by placing stops where liquidity is not obvious, and by passing on bad setups.