Liquidity Sweep (ICT / Smart Money)
The claim: That 'smart money' hunts stops, then reverses — trade the sweep and ride their move.
−$6,262 over 574 trades, out-of-sample. Loses even with zero commission.
How it actually works
The idea: price pushes past an obvious high or low to trigger clustered stop orders ('grab liquidity'), then snaps back. You enter on the snap-back, in the opposite direction.
The session version: Asia builds a range, London sweeps it to fool you, New York makes the 'real' move. It's a compelling, cinematic story.
We tested it
We built it exactly and walk-forward tested it on 3.5 years of Gold with real costs: −$6,262 (Asia-range) and −$6,871 (previous-day) across 574 and 312 trades.
It even loses commission-free (−$5,860 / −$6,653), so it isn't just a cost problem — the sweep edge simply isn't there out-of-sample.
Every figure comes from this project's own out-of-sample walk-forward testing on real costs — the full research record is in the Lab.
What it teaches you
A beautiful, nameable pattern that fits the past chart perfectly can still have no predictive power. Backtest before you believe.
A perfect-looking pattern can still have no edge. The test, not the story, decides.
Put it to work — safely
Whatever you trade, the survivable part is the sizing. Use our free position-size & risk calculator to bound every trade before you take it, and read the live volatility state on the board.
Education, not advice. Nothing here is a recommendation to trade, or a claim about which direction a market will go — see Terms.