Set 5 — Liquidity Sweeps, Volume Profile, and Regimes

What is liquidity in practical trading terms?

Areas where many orders are likely resting, often around obvious highs, lows, and key levels.

Why do obvious highs and lows attract attention?

Because traders place stops, breakout entries, and targets around them.

What is a stop run?

A move through a key level that triggers clustered stop orders.

What is a liquidity sweep?

Price briefly pushes through an obvious high or low, grabs orders, and often reacts sharply.

What is a failed auction?

A move beyond a level that cannot attract continued participation and returns back.

What is a sweep reversal?

A sweep that fails and then reverses back into the prior range.

What is a sweep continuation?

A sweep that keeps going because the breakout is accepted.

What clue often confirms a failed sweep?

Price closes back inside the level and cannot hold beyond it.

Why is it dangerous to fade every new high or low?

Because some breaks are real continuation, not failed sweeps.

What role does time of day play in sweeps?

Sweeps near major session transitions often matter more than random midday pokes.

What is volume profile?

A display showing how much volume traded at each price level.

What is market profile?

A way of organizing price activity to understand balance, acceptance, and auction behavior.

What is the Point of Control or POC?

The price level with the most traded volume in the profile.

What is value area?

The range where a large portion of trading activity occurred.

What is VAH?

Value Area High.

What is VAL?

Value Area Low.

What is HVN?

High Volume Node, a price area with heavy volume and acceptance.

What is LVN?

Low Volume Node, a price area with lighter volume and often faster movement through it.

What does it mean if the market opens inside value?

It often suggests a more rotational or balanced environment unless proven otherwise.

What does it mean if the market opens outside value?

It can suggest initiative activity and potential directional opportunity.

What is a trend day?

A day where price moves with strong directional persistence and limited deep rotation.

What is a balanced day?

A day where price rotates around fair value without strong directional trend.

What does fading mean?

Taking the opposite side of an extended move, expecting price to revert.

Why is fading dangerous on trend days?

Because strong directional days can keep extending without meaningful reversal.

Why is breakout chasing dangerous on balanced days?

Because breaks often fail and snap back into range.

What is a regime filter?

A rule set used to identify what type of day or condition the market is in before trading.

Why does regime matter?

A setup that works in trend conditions may fail badly in balance or chop.