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Previous-Session High / Low Sweepliquidity taken, then reversal

Evidence: StrongIntermediatePrice Action · Liquidity

Mark the previous session's high and low. Stop orders rest just above and just below those two levels.

The setup: price breaks one of them with a wick but closes back inside — the liquidity was taken, but the level was not accepted. The trade is the other way.

The whole setup rests on one thing: where the candle closed. Wick outside and close inside is a sweep. A close outside is a break, and then this setup does not exist.

Category
Price Action · Liquidity
Timeframe
M5 primary · M1 for entry refinement · M15 for context
Suitable pairs
EURUSD · GBPUSD · USDJPY · AUDUSD · XAUUSD
Session
London 07:00–11:00 GMT and New York 13:00–16:00 GMT
Indicators / tools
Previous session high and low · ATR(14). No indicator is required.

Valid setup

S21 · PREVIOUS-SESSION HIGH SWEEP → REVERSAL — VALID SETUP EURUSD · M5 · the level is the edge; the wick is only how you see it happen SHORT 1.08348 1.08438 1.08527 1.08617 1.08707 1.08796 1.08886 ASIAN LONDON 07:00+ GMT PSH — previous session high (buy-side liquidity above) ENTRY on the close back below PSH SL above the sweep wick +2R reference 1R +2R 1 2 3 4 5 6 ① PSH fixed at the session close. It does not move again. ② London approaches it — stops of every short taken below are resting just above this line. ③ SWEEP: wick trades through PSH, CLOSE stays below. ④ Next candle closes decisively below — sweep confirmed ⑤ Entry. The liquidity above PSH has been taken; there is now nothing left up there to pull price higher. ⑥ Target: the session low / prior structural low 1.08743 1.08712 1.08669 1.08521 London open sweep

Exact rules

Entry

  • Calculate the previous session high and low from your broker's daily boundary — and write that boundary down.
  • Session filter: 07:00–11:00 GMT or 13:00–16:00 GMT only.
  • Sweep: an M5 candle whose high goes above the previous session high but whose close comes back below it.
  • Confirmation: the next M5 candle also closes below that level.
  • Sell at the close of the confirmation candle. Mirror the rule at the previous session low for a long.

Stop loss

  • 0.15 × ATR(14) above the high of the sweep candle.
  • It is tight because the sweep candle defines its own invalidation: if price trades above it, the liquidity was not taken — price was being accepted up there.
  • Risk 0.5% per trade.

Take profit / exit

  • TP1 = halfway to the session low, taken as a partial.
  • TP2 = the session low, or the previous structural low.
  • A minimum of 1:2 measured to the sweep candle's high. If it does not reach 1:2, skip the trade.

Build Previous-Session High / Low Sweep

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Trading carries risk and most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade. The chart is an illustration of the rules on constructed candles — it is not a record of a trade and not a backtest.