Liquidity:where the orders rest.

In market microstructure, liquidity is depth: how much volume can trade near the current price before the price has to move. Deep markets have tight spreads and absorb large orders; thin ones gap and slip. That meaning matters to every trader because it decides the cost of getting in and out.

Smart money concepts use the word differently, to mean pools of resting orders at predictable places on the chart. The reasoning is that stop-losses for short positions sit above recent highs, stop-losses for longs sit below recent lows, and breakout traders place entry stops at the same levels. Each of those is an order waiting to be filled, and together they form a pool of liquidity that a large participant could trade against.

Buy-side liquidity (BSL) sits above highs: the buy stops of traders who are short and the buy-stop entries of breakout traders. Sell-side liquidity (SSL) sits below lows: sell stops of longs and sell-stop breakout entries. The places traders most often mark are these:

• Equal highs and equal lows - two or more swing points at nearly the same price, which traders read as an obvious place for stops to cluster.
• The previous day's, week's and month's high and low.
• Session highs and lows, especially the range of the Asian session before London opens - see trading sessions and the Asian session.
• Trendline touches, where stops tend to sit just the other side of the line.
• Old swing highs and lows on the higher timeframe that price has not yet revisited.

A liquidity sweep - also called a grab, raid, purge, stop run or stop hunt - is price trading through one of those levels, triggering the orders beyond it, and then reversing. The classic shape is a wick above equal highs with a close back below them. Traders who use the concept read the sweep as the move that filled someone large, and look for a reversal after it.

A sweep and a genuine breakout look identical at the moment they happen. The difference is only visible afterwards: a breakout holds beyond the level, a sweep closes back inside. That is why most models require a confirmation after the sweep - typically a change of character in the opposite direction, often leaving a fair value gap - before acting.

The 'stop hunt' framing implies someone deliberately pushing price to trigger stops. Sometimes stops are simply triggered because price moved, and the triggered orders briefly add momentum before it fades. From a chart alone, you cannot tell intention from coincidence. The observable part - that obvious levels attract orders, and that price often moves quickly through them - is well documented in how order books work. The motive attached to it is interpretation.