Lesson 3 of 6 10 min read
Liquidity sweeps and stop hunts
Why price often wicks beyond obvious levels before reversing.
Where stops sit
Many traders place stops just beyond obvious highs and lows. Those clusters are pools of liquidity that larger players can use to fill orders.
The sweep
Price briefly pushes through the level, triggers stops, then snaps back inside. A sweep followed by a quick reclaim can hint at a reversal.
Protecting yourself
Avoid placing stops exactly at the obvious spot. Give them logical room based on structure — and size the position down to keep risk fixed.
Key takeaways
- Obvious highs/lows attract stops.
- Sweep + reclaim can signal reversal.
- Wider stop means smaller size, same risk.
Exercise
Find two recent sweeps on any major coin. What happened in the next 24 hours after each?
Educational content only, not financial advice. Crypto is volatile and you can lose money.