You've Been Trading Sweeps Wrong — Transcript

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1. 0:00A lot of traders see any wick above a
2. 0:02high and low and call it a liquidity
3. 0:05sweep. But a tiny wick isn't a sweep.
4. 0:07It's actually just noise. The real
5. 0:09liquidity sweep needs a candle close
6. 0:11above that level. Not just tag it and
7. 0:14pull back off of it. Once you see that
8. 0:16close, that's your signal a stop hunt
9. 0:19had actually just taken place. Now we
10. 0:21wait for the follow through and we want
11. 0:23to see a shift in liquidity to the
12. 0:25opposite direction. So we know that real
13. 0:28money is actually getting involved in
14. 0:30this move. The entry then comes after
15. 0:32price retraces into a fair value gap.
16. 0:34The stop goes above the sweep. Target is
17. 0:36then going to be the next liquidity
18. 0:37draw.
19. 0:38>> I like that he's talking about sweeps
20. 0:40actually being structure breaks with
21. 0:42full body closures. Now, I will say that
22. 0:45yeah, short and small wicks aren't
23. 0:48technically strong liquidity sweeps. I
24. 0:50do think larger wicks can be for sure.
25. 0:53Regardless, you're breaking that high,
26. 0:55you're absorbing whatever is up there
27. 0:56and then you're reverting. I think the
28. 0:58biggest part with this type of setup
29. 0:59that you're going to be looking for is
30. 1:00that immediate reaction after breaking
31. 1:03that high. But the fun thing about this
32. 1:04is we can replicate this setup really
33. 1:07easily into an indicator using Quant on
34. 1:10the new Vella charts. So essentially, I
35. 1:12went through Quant, told it exactly what
36. 1:13I wanted, and now it was able to make
37. 1:16that indicator which I can now use on
38. 1:19Vella chart. Vella is LuxAlgo's new
39. 1:20charting platform. It's living in the
40. 1:22same platform that you've already used
41. 1:23Quant with. Just the name of the charts
42. 1:25is now Vella and it is 100 times better
43. 1:28than it has ever been. What we had it
44. 1:29identify is these sweeps with strong
45. 1:31body closes. If I go into these settings
46. 1:33here, you can see right here you have a
47. 1:35significant body ATR for that breakout.
48. 1:37You can adjust all these settings to fit
49. 1:39this type of strategy that you want to
50. 1:41trade. But what's very unique about
51. 1:42this, similar to a strategy, is the
52. 1:44sweep is only step one. Here there's
53. 1:46maximum bars to a structure break, which
54. 1:48means there needs to be within 10 bars a
55. 1:50nice structure break like you see here
56. 1:52from that most recent higher low. When
57. 1:53you get that and a strong FEG, it'll
58. 1:55plot a window and the FVG saying wait
59. 1:58for retracement. Now, the entry window
60. 2:00is 20 bars cuz we want price to retrace
61. 2:02back into that FVG and reject within
62. 2:04those 20 bars, or in my opinion, it's
63. 2:06not a valid setup. So, we wait for price
64. 2:07to retrace, and as you can see here,
65. 2:09there's a very strong rejection. Then, I
66. 2:11take my short entry right off of that
67. 2:13point. We target the next liquidity
68. 2:14level, which could either be this low or
69. 2:16this low. For this setup, we'll just go
70. 2:18above this candle high here, targeting
71. 2:20this higher low, and we let it play out,
72. 2:22and we run right through that higher
73. 2:23low. Now, there's a few tips with
74. 2:25utilizing this indicator. One, you see a
75. 2:27strong opposing trend to your trade. So,
76. 2:29in this case, it was a bearish FVG. And
77. 2:31two, like I stated before, we get a
78. 2:33really strong reaction after that sweep
79. 2:34occurs. Now, the nice part about this
80. 2:36indicator, it's not just going to plot a
81. 2:37bunch of entry signals left and right.
82. 2:38It will plot all the sweeps, but [music]
83. 2:40you have to have that specific setup to
84. 2:42give you a nice entry. But, you can use
85. 2:44this indicator right now for absolutely
86. 2:46free on Vella Charts. All you have to do
87. 2:47is comment the word Vella, and I'll send
88. 2:49you a link, or just go to luxalgo.com.
89. 2:51When you open Vella, just go to the
90. 2:53indicators tab up here, go down to Lux
91. 2:55Algo, and the indicator will be right at
92. 2:57the top of that list.