A stop hunt you can trade off one candle Wick beyond a prior swing, then close back inside
A liquidity sweep is a fuzzy idea until you give it a rule. The Swing Failure Pattern is that rule: price pokes past a level everyone is watching, fails to hold, and closes back where it came from.
Pick any obvious swing high on your chart. Traders who are long tuck their protective stops just above it, and traders waiting to short place breakout orders there too. Both are resting orders, and resting orders are fuel. An SFP is the moment price reaches up, lights that fuel with a single wick, and then refuses to close above the level. The break is rejected inside the same candle or the next one, and that rejection is your signal.
Bearish at highs, bullish at lows The same rule, mirrored around the level
There are only two SFPs to learn, and they are mirror images. Above a swing high the market grabs buy-side liquidity. Below a swing low it grabs sell-side liquidity. The reaction runs the other way.
No reclaim close, no SFP The wick can lie. The close cannot.
The wick going beyond the level means nothing on its own. The pattern only exists once a candle closes back inside; until that close prints, you are looking at a possible breakout, not an SFP.
A wick above the high just tells you price traded there for a moment. If the candle then closes above the level, that is acceptance: the breakout is real and you have no SFP. If the candle closes back below the level, that is rejection: the breakout failed and the pattern is live. Same first half, completely different trade. Wait for the close.
Two ways to enter the SFP On the close, or on the next structure break
Once the SFP candle closes inside, you have a decision: take the trade immediately on the close, or drop a timeframe and wait for price to break structure in your direction. One is aggressive, one is confirmed.
How to take each entry
- Mark the swing and wait for the close. Draw the prior swing high (or low). Let the candle that sweeps it finish. Only proceed if it closes back inside the level.
- Entry A, on the close. Enter as the SFP candle closes. This is the aggressive model: best entry price, but you are trusting the close without further confirmation.
- Entry B, on the structure break. Drop one timeframe. After the sweep, price usually makes a small swing point against you. When price breaks that swing in your direction, that break of structure is your trigger.
- Size to the same stop either way. Both entries protect behind the same sweep wick, so entry B simply gives up a little reward for a lot more confirmation. Choose per setup, not per mood.
Behind the wick, into the opposite pool Plus the channel that frames the path to the target
The SFP hands you a clean invalidation and a clean destination. Your stop goes just beyond the sweep wick, because if price trades back through the extreme, the sweep was not a sweep. Your target is the opposite liquidity pool.
Placing the stop is the easy half: the wick that took the stops is the furthest price should go if the pattern is valid, so protect a few ticks beyond it. The target takes more work. Price swept one pool; the natural draw is the pool on the other side, the swing low that sits under a bearish SFP or the swing high above a bullish one. To frame that path, draw a parallel channel and set its width from the range that launched the move.
Framing the trade after the SFP
- Stop just beyond the sweep wick. The extreme of the SFP candle is your line in the sand. A trade back through it means acceptance, not rejection, so you want to already be out.
- First target: the opposite pool. Mark the swing low beneath a bearish SFP (or the swing high above a bullish one). That resting liquidity is the market's natural draw and your primary objective.
- Frame the path with a parallel channel. As the reversal develops, connect the lower highs with one line and draw a parallel line across the lows. Two lines catch the move; one line only guesses at it.
- Set the width from the launching range. Use the height of the range or consolidation that started the move as the channel width. That width captures far more of the price action than a single line, and the far line often lands right on the target pool.
The orders behind the SFP A level everyone can see is a level everyone parks orders at
An obvious swing high carries an advertised pool of orders: stops from longs and entries from breakout buyers, resting just above it. Price is pushed into that pool because large positions can be filled there.
Think about who sits above a clean swing high: every long has a stop there, and every breakout trader has a buy order there. To fill a large sell position, an institution needs willing buyers, and they are stacked right above the high. So price is pushed up into that shelf, the resting orders get filled, and with the fuel spent there is nothing left to hold the breakout. The wick is the fill. The close back inside is the follow-through failing. The SFP is the visible fingerprint of that transaction.
Run the checklist on any chart Level, sweep, close, entry, stop, target
You now have every piece: the level, the sweep, the close, the entry, the stop, the target, and the reason it works. Run the sequence below in order on any chart.
- Find an obvious swing high or low. The more traders can see it, the more orders rest at it.
- Wait for a candle to wick beyond that level, taking the resting stops.
- Demand the close back inside. No reclaim close, no SFP. This is the whole pattern.
- Enter on the close (aggressive) or on the first lower-timeframe break of structure (confirmed).
- Stop just beyond the sweep wick; if price accepts back through it, you were wrong and you are out.
- Target the opposite liquidity pool, and frame the run with a parallel channel, never a single line.
- Remember why it works: the market spent its fuel collecting stops and found no follow-through.