Trend-Aligned Swing Entries After Liquidity Sweeps

Summary

This swing strategy looks for a failed break of a recent price extreme, treating it as a possible liquidity sweep. A long setup occurs when price falls below the prior five-bar swing low and closes back above it; a short setup is the inverse at the prior swing high. Trades are filtered by the 200-period EMA, with longs above it and shorts below it, and by RSI thresholds that permit longs above 40 and shorts below 60.

Stops and targets are set from the signal bar’s close using ATR multiples: the stop uses 1.5 ATR and the target uses 3 ATR. The document explains the entry concept but provides no performance data, test design, or evidence that a sweep reflects institutional accumulation or distribution. Results may depend on instrument, timeframe, execution, and how the strategy handles repeated signals.

Key ideas

• A sweep is identified when price pierces a recent high or low and closes back within that level.
• The strategy takes long sweeps above the 200 EMA and short sweeps below it.
• RSI thresholds provide additional entry conditions for both directions.
• ATR sets the stop and target distances, with the stated target distance twice the stop distance.
• The document supplies no empirical results supporting the strategy’s interpretation or performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.