Liquidity sweep explained: ICT stop runs, buy-side and sell-side liquidity

Why liquidity sweeps matter

Every trade needs someone on the other side. A large buyer cannot buy thousands of contracts at once without pushing price up against himself, so he needs a crowd of sellers. Stop orders are such a crowd. Under an obvious low sit the stop losses of everyone who bought above it, and those stops turn into sell orders the moment price trades through.

That is the logic ICT teaches: price is drawn to where the orders rest. A dip under an old low that is quickly bought back shows that someone used the selling to buy. For you, it means two things. Your own stop belongs somewhere less obvious than one tick under the last low. And a sweep, in the right place and time, can be a better entry than buying the bounce before it.

Buy-side and sell-side liquidity

• Buy-side liquidity rests above old highs: the stop losses of short sellers and the orders of traders who want to buy a breakout. A move up through the high sets them off as buy orders.
• Sell-side liquidity rests below old lows: the stop losses of buyers and the orders of traders who sell a breakdown.

The obvious places are the ones everyone can see: the previous day’s high and low, the week’s high and low, the high and low of each session, and two or more highs or lows at almost the same price. ICT calls those last ones relative equal highs or lows, and treats them as a stronger magnet, not as support or resistance.

How to spot a liquidity sweep, step by step

1. Mark the pool before it is hit. Draw the old highs and lows before the session: previous day, overnight session, morning range. A sweep you only notice afterwards is a story, not a plan.
2. Know which side you want. In a bullish market, ICT expects lows to be raided before higher prices; in a bearish one, highs. A sweep against your bias is a warning, not a signal.
3. Watch the time. Many sweeps happen inside a kill zone, around the London or New York open.
4. Wait for the close back inside. A wick through the level that closes back on the other side is the first sign. A candle body that closes far beyond it is not.
5. Look for displacement. The move away should be fast and one-sided, ideally breaking the last short-term swing and leaving a fair value gap. That gap is often the entry.

An NQ example, step by step

1. The sweep (10:00): after drifting down from the 09:30 high of 24,948.25, NQ wicks to 24,846.50, under the previous day’s low at 24,861.25, and closes back above it at 24,869.25. The sell stops under that low are filled.
2. The shift (10:10): a strong candle runs from 24,890.25 to 24,928.50, through the last swing high at 24,924.00. It leaves a bullish fair value gap between 24,893.50 and 24,908.50.
3. The entry (10:25): price pulls back into the gap, down to 24,901.75, and holds above its midpoint at 24,901.00. A long here has its stop under the sweep’s low at 24,846.50.
4. The target (10:35): price runs through the morning high at 24,948.25, where the buy-side liquidity was, and reaches 24,993.75 by 10:55.

The sweep itself was not the entry. Buying the wick at 10:00 would have meant guessing; the close back above, the break of 24,924.00 and the gap gave the confirmation and a defined risk. Size that risk with the futures position size calculator.

Sweep or breakout?

The hardest part is that a sweep and a real breakout start identically. Some clues help:

• How far it goes. In his 2016 lesson on liquidity pools, ICT says a stop run on a 15- or 30-minute currency chart typically reaches 10 to 20 pips past the old low, and that beyond about 25 pips it is probably not just a stop run. Those numbers are for currencies; for NQ, measure your own typical overshoot in your journal.
• How it closes. A sweep closes back inside quickly. A breakout keeps closing beyond the level, and pullbacks hold on the far side.
• Where it happens. ICT reminds students that not every old high is a short: a level reached inside a higher timeframe premium or discount area is more likely to reverse than one in the middle of a trend leg. See PD arrays.
• What it is drawn to. If the bigger picture is reaching for liquidity further away, a run through a nearer level is usually just a stop on the way, not the turn.

ICT’s own words, and how they changed

“Liquidity sweep” is the name used across trading forums and videos. ICT himself rarely uses it as a noun. His terms are stop run, run on stops, buy stop raid and sell stop raid, stop hunt and, for the setup, turtle soup. He uses “sweep” mostly as a verb: price sweeps a high.

• Turtle soup: the name comes from an older setup by trader Linda Raschke that faded the 20-day breakouts used by the Turtle traders. ICT has said his version is simply a stop run, not her rules.
• 2016: in his first mentorship month, a low taken out in a bullish market is a turtle soup long: stops being collected, not a trade gone wrong.
• 2020: he tells students that a sweep under a low and back above is a stop run but not yet a buy; he wants an old high taken first.
• 2023 onward: he describes turtle soup trades where the low is taken at a level he picked in advance and no break in structure is needed, only a sign that price wants higher. In 2025 he adds the “deferred” turtle soup, where the stops were already run before the 09:30 open.

So the answer to “do I need a structure shift after the sweep?” depends on which year you are quoting. For a beginner, waiting for one is the safer of the two.

Common mistakes

• Buying the wick as it happens.

  You cannot tell a sweep from a breakdown while the candle is still open. Wait for the close back inside and a move away.

• Calling every new high a sweep.

  Markets also run highs and keep going. Without a bias and a reason for the level to hold, a sweep is just hindsight.

• Putting your stop one tick under the obvious low.

  That is exactly the pool being swept. Place stops beyond the sweep's extreme or a level that makes sense for the setup, and size down to afford it.

• Trading sweeps against the higher timeframe.

  ICT's sweeps that reverse sit in the direction of the bigger picture: lows raided in a bullish market, highs raided in a bearish one.

• Ignoring the clock.

  A sweep at 10:00 New York time is not the same as one at 13:00 in a quiet lunch. Note the time of every sweep you trade and compare.

How to journal liquidity sweeps in daqverse