Big players need lots of orders on the other side to fill. They often find them where retail traders park their stops.
Liquidity
- Above swing highs and equal highs: buy stops (shorts' stop losses, breakout buys).
- Below swing lows and equal lows: sell stops.
- A sweep pokes through those stops and reverses. That's the "stop hunt" everyone complains about.
Order block
The last opposite candle before a strong move that breaks structure. Price often returns to it later.
Fair value gap (FVG)
A three-candle imbalance: candle 1's wick and candle 3's wick don't overlap. Price often comes back to fill part of it.
Premium and discount
Split a swing range in half. Buy in the lower half (discount), sell in the upper half (premium), in the direction of the higher-timeframe trend.
Wick says
These concepts are a framework, not magic. Backtest them on your pairs. If the order blocks you mark keep working, great. If not, back to the drawing board.
Key takeaways
- Stops cluster above highs and below lows; sweeps target them.
- Order blocks and FVGs are zones price tends to revisit.
- Buy discount, sell premium, with the bigger trend.