A trader explains how to spot swept lows and engineered liquidity to enter trades on the 5-minute chart. Set your stop just below the low and place limit orders at liquidity points to catch upside moves after bearish sweeps.
So this is an example of the people out there that can only trade the higher timeframes. Start off on the higher timeframes. Price trades below an old low from the left-hand side. Big sell-off from the highs coming down and we sweep out lows from the left-hand side. You have price coming down all the way to this low and sweeping it, tapping into an area that we have not tapped into yet that did not have liquidity. Now, in order for us to take advantage of price back up to the upside, we need to see price engineer liquidity first. And what do we have here? Engineered liquidity. Any reactions in this area, deem them to be false. Should be a pullback and we're We're going to participate in the buys back up to the upside. We go bearish, identify where buyers are at. So we're going to open this up to the 5-minute. Look to the left, high taken out, price goes bearish, taps into this whole area, back up to the upside it goes. What does that now told us? We have liquidity below these lows. You have a level of liquidity marked out here, AKA early buyers. You have a low down here that we can put our stop loss. Entry would be right at the low just like this. Stop loss is going to cover this low from the left-hand side. You set a limit at this liquidity point, stop loss goes below entry. You have equal highs left all the way back up here. And We also have these engineered liquidity highs on the way back up, which could be used as a partial point.
