--- title: "Liquidity in Trading: Pools and Sweeps - Get Funded Now" description: "What liquidity means in trading and in SMC: buy-side and sell-side pools, equal highs and lows, and liquidity sweeps. How traders mark them, and limits." url: "https://getfundednow.com/learn/liquidity-in-trading" language: "en" last_modified: "2026-09-22" publisher: "Get Funded Now (getfundednow.com)" translations: es: "https://getfundednow.com/es/learn/liquidity-in-trading" pt-BR: "https://getfundednow.com/pt-br/learn/liquidity-in-trading" fr: "https://getfundednow.com/fr/learn/liquidity-in-trading" it: "https://getfundednow.com/it/learn/liquidity-in-trading" de: "https://getfundednow.com/de/learn/liquidity-in-trading" disclosure: "All trading at Get Funded Now is simulated. 'Funded' means a simulated or virtual account; GFN is not a broker and does not hold client funds." --- Smart money concepts # Liquidity: where the orders rest. Liquidity in trading has two meanings. Generally, it is how much can be traded without moving price. In smart money concepts it means resting orders - stops and breakout entries - assumed to cluster above swing highs (buy-side liquidity) and below swing lows (sell-side liquidity). A liquidity sweep is price trading through such a level, then reversing. [All trading lessons](https://getfundednow.com/learn) · [Read the trading rules →](https://getfundednow.com/rules) ## The two meanings of liquidity In market microstructure, [liquidity](https://getfundednow.com/glossary/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. Equal highs mark buy-side liquidity and equal lows sell-side liquidity. A candle trades above the highs, closes back below them, and price then falls through the lows. Illustrative schematic, not market data: no instrument, price or date is shown. ## Buy-side and sell-side liquidity 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](https://getfundednow.com/learn/trading-sessions) and [the Asian session](https://getfundednow.com/learn/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. ## Liquidity sweeps, grabs and stop hunts 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](https://getfundednow.com/learn/break-of-structure) in the opposite direction, often leaving a [fair value gap](https://getfundednow.com/learn/fair-value-gap) - before acting. ## Is it really a hunt? 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. Step by step ## How to identify it Mark liquidity before price reaches it. A level identified after the sweep is hindsight. 1. On your working timeframe, mark the previous day's high and low and the current session's range. 2. Mark any equal highs or equal lows - two or more swing points within a few pips or points of each other. 3. Note which pools sit closest to price. Those are the levels most likely to be tested first, not necessarily the ones that matter most. 4. When price trades through a level, watch the close: back inside suggests a sweep, a hold beyond suggests a breakout. 5. Before acting on a sweep, require your confirmation - a change of character on a lower timeframe is the usual one. Worked example ## The concept, walked through ### A buy-side sweep, described Illustrative levels in round numbers, described in words. Not a real instrument or price. 1. 1. The pool Price makes two swing highs at 150 over a morning. Traders mark 150 as equal highs - buy-side liquidity. 2. 2. The sweep In the afternoon a candle trades up to 153, triggering buy stops above 150, but closes at 148, back below the level. 3. 3. The confirmation On the five-minute chart price then breaks below the last higher low at 145 - a change of character. 4. 4. The setup A trader using this model might look for a short on a pullback, with a stop above the 153 sweep high. The same afternoon could just as easily have seen price close at 154 and keep rising - a breakout, not a sweep. The label is only settled after the close, and a confirmation rule reduces but does not remove the chance of being wrong. Common mistakes ## Where traders go wrong ### Calling every breakout a sweep In hindsight any reversal after a new high looks like a sweep. Before the close, you do not know which it is. ### Putting your own stop in the obvious place If you believe stops above equal highs get taken, placing yours a pip above them contradicts your own model. ### Confusing the two meanings A pool of stops is not the same as a deep, liquid market. A sweep can happen in thin conditions where fills are worst. ### Fading every sweep Trading against every run of a high in a strong trend is fighting the trend, not reading liquidity. Limitations ## What it cannot tell you No chart concept predicts price. These are the limits worth keeping in view. - Retail traders cannot see where stops actually sit. Liquidity pools are inferred from chart shapes, not observed. - Deliberate stop hunting cannot be distinguished from ordinary price movement on a chart. - Sweeps are only identifiable after the candle closes, and a confirmation rule adds delay. Both reduce, but do not remove, the ambiguity. In an evaluation ## Using it on a simulated account Liquidity thinking is most useful on an evaluation as a stop-placement check. If your stop sits exactly where the chart's obvious pool is, it is exposed to the same sweep you might otherwise trade. Moving it beyond the sweep extreme widens it, which means a smaller position for the same risk. Sweeps of the previous day's high or low often happen around session opens and scheduled releases, when spreads widen and fills slip. Those costs count toward the daily loss limit like any other loss. - [Does slippage excuse a breach?](https://getfundednow.com/rules/slippage-and-spreads) - Trading rule - Fast moves through a level are where fills slip most. - [Can I trade the news?](https://getfundednow.com/rules/news-trading) - Trading rule - Many sweeps happen on releases, which fall inside the funded-stage news window. - [What is the daily loss limit?](https://getfundednow.com/rules/daily-loss-limit) - Trading rule - Stops taken by a sweep count in full - 3% on Instant and 5% on 1 Step and 2 Step. Questions ## Asked about this concept Resting buy orders above a high: the stop-losses of short positions and the buy-stop entries of breakout traders. Sell-side liquidity is the mirror, below a low. A breakout holds beyond the level; a sweep trades through it and closes back inside. They are indistinguishable until the candle closes, which is why most models wait for a confirmation. Keep learning ## Related lessons - [Smart money concepts (SMC and ICT)](https://getfundednow.com/learn/breaker-block) - Breaker Blocks Explained (ICT and SMC) - An order block that failed after a sweep of liquidity and a shift in structure, then treated from the other side. - [Smart money concepts (SMC and ICT)](https://getfundednow.com/learn/smt-divergence) - SMT Divergence in Trading, Explained - One of two normally correlated markets makes a new high or low and the other does not. What the disagreement is taken to mean. - [Smart money concepts (SMC and ICT)](https://getfundednow.com/learn/power-of-three) - AMD in Trading: Power of Three Explained - The power of three model: a quiet range, a false move against the day's direction, then the real move - and why it only fits in hindsight. - [Smart money concepts (SMC and ICT)](https://getfundednow.com/learn/break-of-structure) - Break of Structure (BOS) vs CHoCH - BOS is a break of a swing point in the trend's direction; CHoCH is the first break against it. The vocabulary of market structure. - [Asian Session: What Time It Opens](https://getfundednow.com/learn/asian-session) - Sessions and market events - When the Tokyo-centred Asian session runs in UK, US and India time, and why its range matters to traders who never trade it. Sources ## What this page relied on 1. [Liquidity sweep](https://www.luxalgo.com/library/concept/liquidity-sweep/) - LuxAlgo Library. Retrieved 22 September 2026. Where resting orders are usually assumed to sit - prior swing points, equal highs and lows, session and prior-day extremes - and the alternative names for a sweep. 2. [Smart money technique divergence](https://www.luxalgo.com/library/concept/smart-money-technique-divergence/) - LuxAlgo Library. Retrieved 22 September 2026. SMT divergence as a failure of one correlated instrument to confirm another's new extreme. 3. [OTC foreign exchange turnover in April 2025 (Triennial Central Bank Survey)](https://www.bis.org/statistics/rpfx25_fx.htm) - Bank for International Settlements. Retrieved 22 September 2026. Global foreign exchange turnover and its concentration in a handful of trading centres. Educational content only, not investment advice or a recommendation to trade. Chart concepts describe what price has done; none of them predicts what it will do, and trading any strategy can lose money. Get Funded Now accounts are simulated and trade virtual funds. Last reviewed 22 September 2026. Ready when you are ## Your capital stays yours. The risk is ours. One evaluation fee, no time limits and up to 90% of simulated profits. Pick an account size and your credentials arrive by email within minutes. [Start your challenge →](https://getfundednow.com/challenges) · [Read the rules](https://getfundednow.com/faq) No subscriptions or hidden fees Payouts every 14 days $400,000 max total allocation --- Source: https://getfundednow.com/learn/liquidity-in-trading Facts about Get Funded Now in one file: https://getfundednow.com/llms.txt