Liquidity sweep and time price action

Trade One

A well-structured multi-timeframe liquidity sweep strategy that starts from the higher timeframes and narrows down to precise entries on the 5-minute chart.

This approach focuses on identifying where the market is likely to grab liquidity before making a strong move, ensuring tight stop losses and high reward-to-risk ratios.

Liquidity Sweep Forex Strategy (Daily → H4 → H1 → M30→ M15 → M5)

1. Higher Timeframe Bias (Daily)

Mark key swing highs and swing lows on the daily chart (previous day’s high & low, weekly highs/lows if relevant).

Identify major liquidity pools where retail traders might have clustered stop-loss orders.

Determine the overall market structure (uptrend, downtrend, or range).

If price is in an uptrend, expect liquidity sweeps below recent lows before resuming upward.

If in a downtrend, expect liquidity sweeps above recent highs before dropping.

2. Refine Zones (H4)

Zoom to H4 and mark order blocks near those daily liquidity levels.

Identify imbalances / fair value gaps (FVGs) where price might return after the sweep.

Decide the most probable direction for the week/day using:

Daily bias + H4 structure

Session timing (Asian/London/NY open tends to sweep liquidity)

3. Confirm Intraday Setup (H1)

On H1, watch how price interacts with your H4 liquidity levels.

Look for:

Sweep → price wicks beyond a high/low → immediately reverses into the range.

Displacement move → strong momentum candle in the opposite direction after the sweep.

This confirms smart money is stepping in.

4. Fine-tune Entry Zone (M30 and M15)

Switch to M30 and do the same for M15 and mark the exact area of the liquidity sweep and displacement origin.

Wait for price to return (pullback) into:

The origin of the displacement candle (order block)

Fair Value Gap (FVG) created by the impulse move

5. Execute on M5

Drop to M5 for precise entry.

Wait for:

Market Structure Shift (MSS) → lower highs broken in buy setups / higher lows broken in sell setups

Break of structure + retest before entry

Stop Loss (SL): 2–5 pips beyond the sweep wick.

Take Profit (TP):

First TP at 2R (secure partials)

Second TP at 3–5R (main target)

Optional extended target at the opposite liquidity pool on M15/H1.

Example Trade Flow

Daily: See uptrend → liquidity sitting below previous daily low.

H4: Identify bullish order block just below that low.

H1: Price sweeps the low → strong bullish engulfing candle.

M15: Price pulls back into the H4 order block.

M5: Market structure shifts bullish → enter long.

SL: 4 pips below the sweep low.

TP: 3R first, 5R final at the next major high.

Risk & Money Management

Risk 0.5–1% per trade for precision setups.

Trade Two

Step-by-Step Trading Rules:

1. Mark and draw previous day high and low  marking candles including wick. Between 1330 hours and  2030 hours GMT. Allow entry in input

2. Mark and draw premarket period of the day high and low  marking candles including wick. Between 0800 hours and  1330 hours GMT. Allow entry in input

3. Mark 5 mins candle of the day  marking candles including wick at 1530 hour GMT and allow entry .

4. Allow a breakout closed candle from high of candle at 1530 hours GMT for a buy and wait for retest of candle to closed below that high of 1530 hours candle then buy from the closed of candle above the region of 1530 marked line

5. Confirmation Candle for Entry after the retest  must meets the following criteria:

For Buy: Bullish Engulfing, Hammer or dragonfly doji above the breakout level.

For Sell: Bearish Engulfing, Shooting star or gravestone doji below the breakout level.

6. Set SL at the next marked line for either previous day or premarket

7. TP1 at the next line above 1530 hours candle for either previous day or premarket low or high at percentage of lot size and allow entry in input

8. TP2 at the next available marked line for either previous day or premarket low or high. And If there is no high or low marked for previous day and premarket. Take ratio 1: 3 as the distance between entry and SL

9. Close all trades as 2 opposite candles closed below EMA 50 for buy

10. If the breakout candle closed above previous day or premarket marked line above the 1530 candle wait for retest that is a candle closed below and enter buy as the candle after that closes above and close all trades as candle hit either the high of previous day or premarket high line

11. Use percentage of available fund as option for lot size