Forex Liquidity Sweeps: Rules and Counterexamples
Identify our same-candle sweep and distinguish a break.
Technical terms explained
Liquidity sweep
An excursion beyond a reference followed by a return inside it. Our beginner exercise uses the same candle close.
Buy-side liquidity
A label for possible buy orders above a price reference, including stops used to exit short positions.
Sell-side liquidity
A label for possible sell orders below a price reference, including stops used to exit long positions.
Our introductory sweep rule requires a wick strictly beyond a marked reference and a close back inside on the same candle. Some community definitions allow a multi-candle return; that is a different rule. Sweeps can precede continuation, reversal or a range. Observing one does not settle the next move.
Our operational rule
High > reference and close < reference for a buy-side sweep; reverse the inequalities for sell-side.
Worked example
A candle crosses an overnight low and closes back above it: a sell-side sweep under this rule.
Counterexample
A candle closes beyond the level and stays there; it fails the same-candle return requirement.
Watch for this mistake
Calling every break a sweep regardless of the close.
Charts are synthetic. These classification rules are not evidence of profitability.
Source and conventions
Lab operational definitions · version 1
Original exercise conventions: strict outside-wick FVG geometry; two completed neighbours on each side for swings; completed close through declared references; same-candle cross-and-return for a sweep. These are educational classification rules, not demonstrated trading edges.