Liquidity Sweep → Market Structure Shiftthe full sequence
The full validated sequence: liquidity taken → displacement → break of structure → retracement → confirmation.
The sweep says the stops were collected. The displacement says genuine intent followed. The structure shift says the structure actually changed. Without all three, this is a wait.
This is the most strongly evidenced setup on the page, because every step of it is an observable, mechanical condition — and its core mechanism is documented directly from FX order-book data.
- Category
- SMC · Reversal
- Timeframe
- M5 primary · M15 context
- Suitable pairs
- GBPUSD · EURUSD · USDJPY · AUDUSD · XAUUSD
- Session
- London and New York
- Indicators / tools
- Equal highs and lows · swing structure · ATR(14). No indicators.
Valid setup
Exact rules
Entry
- Identify equal lows — two or three lows within a tolerance band — or one clear prior low.
- Sweep: an M5 candle whose low goes below those lows but whose close comes back above them.
- Displacement: within the next one or two candles, a candle whose range exceeds 1.5 × the prior twelve-bar average and whose body is at least 70% of its range.
- Structure shift: a candle closes above the previous lower high.
- Retrace and confirm: price comes back into the displacement candle's range, then a candle closes higher. Enter at that close.
Stop loss
- 0.2 × ATR(14) below the low of the sweep candle.
- That is the honest invalidation for the whole setup: going below that low means the liquidity was not taken — price was being accepted down there.
- Risk 0.5%–1%.
Take profit / exit
- First structural reference: the liquidity pool on the opposite side — equal highs — or the previous major swing high.
- A minimum of 1:2 measured to the sweep low, worked out before you enter.
- A partial at 1R is optional.
Build Liquidity Sweep → Market Structure Shift
Reading this page is free and always will be. Taking it is what costs — the complete MQL5 for the rules above, yours to keep, permanently. Five of them cost $10 and they never expire.
More from Market structure
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.
