When EURUSD Sweeps a High, Does It Reverse? Usually Not.
Reversal rate (%)
Trading social media loves the "liquidity sweep": price spikes beyond a swing high, grabs the stops resting above it, then reverses. It's a compelling story. We tested it mechanically across every EURUSD occurrence in 16 years — a wick beyond a recent swing high or low that closes back inside — and measured what happened over the following day. 4,986 sweeps.
The story is mostly wrong
| Outcome | Count | Share |
|---|---|---|
| Continuation (price closes beyond the level) | 3,402 | 68.2% |
| Reversal (rejects and moves away from the level) | 1,506 | 30.2% |
| No clean resolution | 78 | 1.6% |
Continuation beats reversal better than two to one. Most of the time, a wick beyond a swing level is not a trap being sprung — it is the level genuinely breaking, with the close-back-inside being noise on the way through. Fading every sweep is a slow losing strategy.
Depth is the tell — but backwards from the folklore
If sweeps were stop-hunts, deeper grabs should reverse harder. They do the opposite of what most assume, and it's subtle:
Shallow pokes (a few pips past the level) reverse ~29% of the time — they're mostly continuation. Only the deepest sweeps (beyond ~50 pips) reverse close to half the time, and even then it's a coin flip. A deep sweep is more likely genuine exhaustion; a shallow one is usually just the level breaking. Either way, depth alone never gets you above 50% reversal.
Timing changes the odds more than depth
Where the sweep happens matters more than how deep it is:
| Window | Reversal rate |
|---|---|
| London / New York hours (07:00–16:00 UTC) | ~35% |
| Late / thin hours (20:00–21:00 UTC) | 14–18% |
Sweeps during active, liquid hours are far more likely to reject than sweeps in dead hours — where a poke past a level almost always just keeps going. Reversals need real two-sided participation to form.
What this means
We keep the exact reversal-entry filters private, but the transferable lessons are clear and they run against the popular narrative:
- A sweep is continuation until proven otherwise. The base rate is ~68% continuation — start there, not at "reversal."
- Depth cuts against folklore: shallow sweeps mostly continue; only deep, exhausted sweeps approach even odds of reversing.
- Reversals are a liquid-hours phenomenon. In thin sessions, a level that gets swept is usually just gone.
The edge here isn't spotting sweeps — they're everywhere. It's refusing the reflex to fade them, and only taking the small, filtered subset where the odds actually flip.
Studies like this become the filters inside a documented playbook — the research → playbook → backtest → live loop, locked to one instrument at a time, rather than a scanner firing on everything.