Core Concepts
ICT Liquidity: Buy-Side, Sell-Side and Liquidity Sweeps
Liquidity is one of the most-used terms in ICT and Smart Money Concepts. In the framework, traders mark areas around obvious highs and lows where orders may be concentrated and then study how price interacts with those areas.
Buy-side and sell-side liquidity
Buy-side liquidity (BSL) is commonly marked above prominent highs, while sell-side liquidity (SSL) is commonly marked below prominent lows. These labels describe locations on a chart; they do not prove who placed every order there.
Equal highs and equal lows
Repeated or closely matched highs can be treated as a visible area of potential buy-side liquidity, while repeated lows can be treated as potential sell-side liquidity. The important skill is defining a consistent rule for what counts as equal.
What is a liquidity sweep?
A liquidity sweep describes price moving through a previously marked high or low and then reacting. Traders often look for additional confirmation after the sweep rather than treating the sweep alone as an entry signal.
Avoiding the common mistake
Do not assume every wick is a stop hunt or that every sweep must reverse. Record the setup conditions before the outcome and test them over a meaningful sample.
Worked example (hypothetical)
Suppose two highs form near the same price and a later candle trades above them. Before calling it a sweep, define how close the highs must be, how far price must cross the level and whether a close back inside the range is required. Then track what happens over a fixed number of candles, including continuation and sideways outcomes. The chart can show the price path, but it cannot prove the exact orders present or that a participant deliberately targeted them.
FAQ: Can a chart show exactly where stop orders are?
A normal price chart does not reveal the complete order book or the identity and intent of participants. Visible highs and lows can be used as reference areas where orders might be hypothesized to cluster, not proof that orders are present.
FAQ: Does a liquidity sweep normally have to reverse?
No fixed outcome is required. Price can reverse, continue through the level or consolidate. Evaluate what happened after the event using a predefined time horizon and count all qualifying cases.
FREE LEARNING PATH
Turn this concept into a complete trading framework.
Create a free account to track your progress through the ICT Flow curriculum, then continue from the foundations into 38 modules and 203+ lessons.