Free lessons › Liquidity Sweep Reversal › Trading the Trap
Where to hide your stop
Beyond the sweep, not at the obvious level.
7 min · Intermediate
What you'll learn
- Place a stop beyond the sweep extreme with a sensible buffer.
- Explain why a stop at the obvious level turns you into the next liquidity.
- Resize a position so a wider, correct stop still risks only 1% of the account.
Key takeaways
- The sweep extreme is the real invalidation for a sweep-and-reclaim trade.
- A stop at the obvious level often becomes the next liquidity pool.
- Add a buffer that fits the stock's spread, and avoid round numbers.
- Wider stops mean fewer shares; dollar risk stays at 1%.
- If the correct stop fails the 2R test, skip the trade.
Glossary
- Sweep extreme — The lowest price of a bearish sweep or highest price of a bullish sweep.
- Stop buffer — Extra distance added beyond an invalidation point to allow for spread and normal noise.
- Invalidation — The price at which the trade idea is proven wrong and you exit.
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