The idea
Equal lows, double bottoms and the lows of a range are where many traders put their stop-loss orders. Price sometimes dips just beneath them, triggers those stops and then reverses as if the break never happened.
This strategy waits for that sweep: a candle that trades below the lows but closes back above them. It buys the close, puts the stop under the sweep's wick and targets the other side of the range, where the next cluster of stops sits.
Watch it play out
Step by step
The rules
Setup
- Two or more lows at about the same price (or a clear range low).
Entry
- A candle trades below the lows and closes back above them: buy at the close.
- Mirror it for highs: a sweep above equal highs that closes back below is a short.
Stop-loss
- Just beyond the sweep candle's wick.
Target
- The opposite side of the range (the equal highs above), or 2R.
Filters that help
- Prefer sweeps into a higher-timeframe level or in the direction of the bigger trend.
- If the next candles close back below the lows, the sweep has failed.
Why it can work
Triggered sell stops are market sell orders. A large buyer can fill a big order against them without chasing price up, which is why a sharp dip below the lows, followed by a fast recovery, can mark the end of a move rather than the start of one.
The idea is old: Linda Raschke and Larry Connors described fading failed breakouts of 20-day lows as 'Turtle Soup' in the 1990s. Smart Money teaching recast it in terms of liquidity.
Worked example
EUR/USD makes two lows at 1.0900. A candle drops to 1.0888, then closes at 1.0906: buy, with the stop at 1.0884, 22 pips away.
The range high at 1.0960 is the target, 54 pips up, about 2.5R. Risking $100 that is 0.45 lots.
When it works, when it fails
Works best
At obvious levels in ranging or turning markets, when the sweep is quick and the close back inside is strong.
Struggles
In real breakdowns: sometimes the lows break because sellers are in control, and the 'sweep' is the start of a trend. A close back above the lows helps, but does not prevent this.
Common mistakes
- Calling every wick under a low a sweep, without waiting for the close back above.
- Fighting a strong trend with sweeps against it.
- Moving the stop lower when the sweep keeps going.
Variations
- Turtle Soup
- The original: fade a new 20-day low that is quickly rejected, from Raschke and Connors' book Street Smarts.
What the evidence says
Evidence: Popular, untestedWidely used, but no rigorous public testing. An idea to test yourself.
Smart Money and ICT concepts are among the most popular ideas in trading education right now, especially on YouTube and TikTok, but there is no rigorous public study showing their entries have an edge after costs.
Part of the reason is that the rules leave room for judgement, so the same chart can be read two ways. Treat it as a framework to write down precisely and test on your own records, not as a proven method.
Questions
- What is a liquidity sweep?
- A move just past an obvious high or low that triggers the stop orders resting there, followed by a quick reversal back inside.
- How is a sweep different from a breakout?
- A breakout closes beyond the level and keeps going; a sweep pokes beyond it and closes back inside. The close is what tells them apart.
- Is a stop hunt done on purpose?
- Sometimes large orders are filled against triggered stops, but there is no need to assume a plot: crowded stops at obvious levels create these moves on their own.
- Where does the stop go on a sweep trade?
- Just beyond the sweep candle's wick. If price trades past the extreme of the sweep, the idea that the move was only a stop run is wrong, and the trade should be closed.