A sweep or a real breakout

How to tell a real move beyond a level from a stop hunt: by the candle close and the speed of the return.

Author: I. D. Galtsov

Scheme on candles

A sweep or a real breakout — what it is?

A sweep and a genuine breakout look identical in the moment: price moves beyond the level. What separates them is what happens next.

A sweep is a move beyond the level with no acceptance and a fast return. The job is done: the orders have been taken, there is no reason to go further.

A genuine breakout is a close beyond the level, continuation, often an imbalance and a subsequent break of structure. Price does not come back.

A sweep or a real breakout — how it is built?

Tell them apart by three signs: did the candle close beyond the level, did price return inside within the next few candles, was there a break of structure after the move out. Two of the three against it means a sweep.

A sweep or a real breakout — common mistakes

Making the decision before the candle closes.

Calling every move beyond a level a sweep: genuine breakouts happen too, and often.

Turning around right after the return, without a CHoCH.

Forgetting to check whether there is liquidity still further along the move.

Related to

Glossary

Breakout
price leaving a level with a candle closing beyond it.
close
the last price of the period. Considered the most important of the four: breakouts are confirmed by the close.
imbalance
a stretch of chart price went through too quickly, without even trading.
break of structure
price closing beyond the last structure point **in the direction of the trend**. It confirms continuation.
candle
the element of the chart that shows four prices for a period: open, high, low, close.
change of character
the first close **against** the trend. It points to a possible reversal.

Test yourself

Where was liquidity swept below and price came back?

Correct. The app has tasks like this in every lesson — 119 lessons on real charts. Solve in the app →

Not this one. The right answer is the other chart. The app has tasks like this in every lesson — 119 lessons on real charts. Solve in the app →

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