Have you noticed how the market always seems to stop out your shorts right before dropping? Most traders lose money because they get lured into buying breakout pumps, only to watch the price reverse. It feels like every time you try to hedge, you get squeezed out.
To beat this cycle, you need to understand how liquidity sweeps work. In bearish environments, price repeatedly pushes up to sweep the local highs while leaving the swing lows completely untouched. This behavior tricks retail into thinking longs are the safer trade, which is precisely when you should be looking to build a short. We see this pattern play out constantly on major assets like
$BTC .
Your playbook for this is straightforward. Instead of chasing the breakout, wait for the price to grab the liquidity above the previous high. Once the sweep occurs and price closes back inside the range, that is your trigger to enter a short with a tight invalidation above the newly formed wick. Applying this setup on
$ETH allows you to trade with the trend rather than acting as exit liquidity for whales.
How do you plan to manage your risk during the next liquidity sweep?
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