ICT Liquidity: Buyside, Sellside, Equal Highs and Sweeps

Buyside and sellside liquidity, in ICT’s teaching, are the orders resting above old highs (buyside) and below old lows (sellside): the stop losses of traders already in a position, plus the orders of traders waiting to buy a breakout or sell a breakdown. Equal highs and equal lows, exact or only relatively equal, are where those orders pile up most obviously. In ICT’s reading, price is drawn to these pools, and a run through one may come before a reversal.

New to ICT? Start with What is ICT?

What is liquidity in ICT?

Liquidity in ICT’s teaching is simply orders: “buy orders and sell orders, it’s as simple as that” 1:09. His fuller definition is “the open interest of buyers and sellers in the market”, found at or near specific price levels 0:49.

Those levels are old highs and old lows, the swing points covered in ICT Market Structure, because that is where traders leave orders. ICT says you need no order book to find them: common sense and a look at where the chart shows old highs and old lows are enough 7:19.

When price reaches those orders, the stops are triggered: below an old low, the sell stops become market orders to sell 9:32. ICT’s entry idea is to have a buy limit order waiting at or just below that low. Read it as an explanation for why price often reacts at obvious levels, not proof that anyone is hunting your stop.

Buyside and sellside liquidity

Buyside liquidity (BSL) is the buy orders resting above an old high, and sellside liquidity (SSL) is the sell orders resting below an old low. Above an old high sit two kinds of buyer: short sellers whose protective buy stops are there, and traders who read a move above the high as a bullish breakout and buy it 3:44. Below an old low it is the mirror.

ICT finds them by playing the other trader: “if I were short right now, where would my protective buy stop be?” 4:48

The name describes the orders, not who is winning. ICT’s idea is that large traders buy into the sell stops below a low and sell into the buy stops above a high. In his long example that is the whole trade: buy at the sellside pool, then sell into the buyside pool above 12:35. These are not the “buy-side firms” of finance news, such as fund managers.

Where liquidity pools form

A liquidity pool forms at any old high or old low that other traders can see. ICT says a single old high is enough to form one, and so is a cluster of relatively equal highs or lows 5:09.

The more obvious the level, the more orders it gathers. ICT calls equal highs and lows “the easiest most obvious price point to see in charts” 7:45. Many traders who use his ideas also mark the previous day’s, week’s and session’s highs and lows, since those are levels everyone watches.

Time matters too. In a 2017 example, news at the New York open pushes price above equal highs, a raid on liquidity that makes the high of the day 2:57. When those windows fall is the subject of ICT KillzonesComing soon. Once price has traded through a pool, its orders are filled, so the next untouched high or low becomes the one to watch.

Internal and external range liquidity (IRL and ERL)

Internal range liquidity (IRL) is the liquidity inside a price range, and external range liquidity (ERL) is the liquidity outside it: the buy stops above the range high and the sell stops below the range low. The range runs from an old high to an old low, so ERL is the same old-high and old-low liquidity this guide has covered so far.

ICT gave a whole 2022 lecture to internal range liquidity 0:28, and his definition covers more than fair value gaps: “short-term lows or short-term highs inside a price leg that we’re retracing back into”, with stops above or below them, “or an imbalance in that same range of price action” 35:04. So the short-term swing points inside the leg count, not only the fair value gaps covered in ICT Fair Value Gap. Pointing at a gap in the middle of a range, he calls it internal range liquidity “because it’s internal relative to this low and this high” 45:33.

ICT uses the pair to plan a trade. Buying inside a range at internal range liquidity, he looks for a move up to the external range liquidity above, where he takes some or all of his profit 8:38. In another example, a short, he sums it up as “partials, internal range, external range, your trade” 45:49: the gap inside the range for partial profits, the stops below the old lows for the trade.

Equal highs and lows vs relative equal highs and lows

Equal highs are two or more highs at exactly the same price, and relative equal highs are highs that are close but not identical. ICT reads both the same way, as one pool of buy stops above the highs; lows are the mirror, with sell stops below. He does not separate the two names himself: the split here is to show that an exact match does not matter.

In a 2017 lecture he said of equal highs: “it doesn’t make a difference if it’s exactly or if it’s off by one or two pips, the general theme is if it looks close enough”, and close enough, “it’s a double top or a double bottom”, the classic name for the pattern 8:08. He was already using the term “relative equal highs” that year 14:24. In 2020 he defined them as “multiple candles or multiple levels that look very close to one another in height or in depth” 4:40, and counts the term as part of his own school of thought 5:27.

ICT gives no number for how close is close enough. His “one or two pips” was about forex; on any market, judge it by eye on the timeframe you are reading. If the highs look like one level at a glance, traders treat them as one, and their stops sit together. Indicators that mark equal highs use a small tolerance, such as a few ticks or a small fraction of the average range, but that is a setting, not ICT’s rule.

In 2024 he offered students what he called a secret weapon for reading them 1:15:22: when the left of two relative equal highs is slightly higher than the right, he rates it a “very very high probability” that price will want to take them, though not necessarily in the session you are trading. His reasoning is that the lower second high reassures the shorts, so new shorts put their stops just above the pair. He calls this “priming”.

Are equal highs resistance or liquidity?

To ICT, equal highs are liquidity, not resistance: the stops resting above them make them a level price may be drawn to and run, rather than a ceiling. Classic charting reads the same picture as a double top. As ICT put it in 2017, retail teaching treats these as support and resistance, while institutional traders “think entirely different” 8:22.

In 2020 he put it plainly: “I’m not looking at it in terms of saying ... this is a resistance level, I’m teaching that this is an area where there are willing buyers up there” 6:19. Most traders who sell the second touch put a stop just above it, so each touch adds to the pool. In 2023 he described traders who trust “imaginary support resistance lines” going short below them with their stops above, and said the market runs for those buy stops “because the algorithm does not want them to pull their order” 22:58.

His shorthand is “smooth edges like to be made jagged” 2:33:47: a clean, smooth line of highs or lows is the one he expects price to disrupt. Neither reading is always right. Some equal highs hold for weeks, and some are run within the hour. The ICT reading changes what you watch for when price trades back up: a run on the stops, not a bounce off a wall.

Trendline liquidity and ICT’s phantom trend line

Trendline liquidity is the stops resting just beyond an obvious trend line: below a rising line that traders buy against, or above a falling line that they sell against. In the lectures we checked, ICT does not use the term. His name for the idea is the phantom trend line, a concept he says he built to attack the whole premise of diagonal support and resistance 52:43. Looking for one, he says, means looking for the lines retail traders will see, have faith in and put their money behind 1:30:05.

The logic is the same as for equal highs. The more obvious the line, the more traders buy each touch with a stop just under it. When a supposed diagonal support or resistance looks that obvious on the timeframe he is reading, ICT says price is going to “draw to the midpoint and draw to that liquidity” 2:16:23. Later in the same session he pointed to sellside resting below “all this trend line support”: “it’s a phantom” 3:07:08. In 2022 he said he had called a move that would run out the lows and break a trend line retail thought noteworthy 56:11.

A break of the line is not an entry on its own. In one 2023 lecture he watched a possible phantom trend line and planned to look for the sellside below it only if the line broke 37:05. Trend lines are also less exact than highs and lows: as ICT put it in 2024, “everybody’s going to have a different diagonal trend line” 2:23:52. He marks his own levels flat: a small horizontal line across equal highs or lows is, he says, “the only type of trendline I like” 7:56.

High- and low-resistance liquidity runs

A high-resistance liquidity run is ICT’s name for a move to an old high or low with many swings in its way, and a low-resistance run is one with a clear path. When price must climb back through a lot of price action to reach an old high, ICT calls it a high-resistance run, and “the least probable trading condition to look for longs” 7:26.

A high-resistance run usually needs a push from outside. ICT says it generally takes a sharp economic release, such as non-farm payrolls or FOMC, to knock through all those levels 8:31. We tested what ICT says about FOMC on 61 FOMC days of NQ futures. In the same downtrend, each new low has little in the way, so the run down through it goes “like a hot knife through butter” 19:25.

Use it to judge which pool is within reach. The old high or low with a clean path to it may be the likelier draw, a theme ICT Daily Bias and Draw on LiquidityComing soon builds on.

What is a liquidity sweep?

A liquidity sweep is a move that trades through an old high or low, takes the orders resting there, then closes back on the other side and moves away. ICT uses “sweep” as an everyday verb (“it might be a sweep on stops and then it continues higher”); his own names for the event are a run, a raid and a purge. His test is what happens next: the liquidity has been purged “only if we start to move away from it” 21:31.

You cannot tell a sweep from a break while the wick is printing. The close and the candles after it decide: back inside and moving away is a sweep, beyond and holding is a break. After a sweep, ICT looks for a break the other way, the market structure shift covered in ICT Market Structure (in this 2020 lecture he calls it a market structure break), which he counts “only on the basis of a liquidity purge” 22:02.

What is ICT turtle soup?

Turtle soup is ICT’s name for a false breakout: a run above an old high that fails and trades lower, or a run below an old low that fails and trades higher. In his words, it is “a fake break below an old low and rally higher, or a fake break above an old high and go lower, which is what I dub a turtle soup” 25:28. The first is a turtle soup long and the second a turtle soup sell 2:46.

Turtle soup is the trade taken on a sweep: the run takes the stops beyond the level, and the turtle soup trader takes the other side. Once the level is taken, ICT wants a strong reply: “turtle soup’s a false breakout pattern, it went below that low, we should see a responsiveness that’s aggressive that moves higher” 32:28. In his fair value gap lecture he expects price to come back up after “a turtle soup or false break below an old low”, because “we’ve already taken the sell side liquidity out” 6:57. Price does not always have to trade through the whole old high or low: he notes it is “not always required to see a higher high” for a turtle soup sell, or a lower low for a turtle soup long 13:56.

The setup depends on where it happens. ICT ties it to premium and discount: a run below a previous low while price is in discount “is probably going to be a turtle soup buy”, and a run above an old high in premium a turtle soup sell 7:14. He says the question he gets “all the time” is how to know whether the market will keep going lower or go below an old low and then rally. In the same lecture he says that if the conditions are bullish and a low is swept out, “that’s when you anticipate a turtle soup” 40:16. His method for telling the two apart starts with premium and discount: he draws the range over the move up, waits for price to come back to equilibrium, and looks for buys once it is in discount 40:59. Premium and discount have their own guide, ICT Premium and DiscountComing soon.

Even then, ICT calls the first drop below a low only “a potential false break or turtle soup long”, and waits for a real move back up, in the form of a market structure shift, before treating it as real 0:49. Like any sweep, it can fail. ICT says plainly that “it’s not going to be perfect” 31:41, and if price closes beyond the level and holds, it was a breakout, not a turtle soup.

The name comes from a setup in Laurence Connors and Linda Raschke’s book Street Smarts, which faded failed 20-day breakouts. ICT credits the book for “the understanding of a stop raid”, but says what he teaches is “my version, rendition of a turtle soup” 1:58:14.

Run, raid, sweep, stop hunt, turtle soup: the names compared

Run, raid, purge, stop hunt and sweep all describe the same event, price trading through a pool of resting orders; turtle soup is the name for a false break of an old high or low. ICT uses most of these words himself, and some of the words you will see online are not his.

These are his own words: he teaches when to anticipate raids 0:46 and set students to look for stop hunts that lead to market structure shifts 35:48. Turtle soup, the trade taken on a false break, has its own section above.

“Stop hunt” sounds personal. ICT teaches that price is delivered by an algorithm that reaches for resting orders, and calls a level that has gathered them “engineered liquidity” 9:02. This guide uses the words only to describe what price does at obvious levels, where stops cluster, not to claim that anyone is watching your stop.

Through the Quarterly Theory lens

Quarterly Theory reads liquidity by the clock. Every cycle, from the year down to the 22.5-minute Micro, has four quarters, and the previous quarter’s high and low are its old high and old low: the obvious pools, fixed by time instead of picked by eye, so every asset in the triad is measured against the same kind of level. Quarterly Theory also gives the direction: the True Open, the opening price of each cycle’s second quarter. Price above it is premium, below it is discount. What is Quarterly Theory? covers the clock.

Its SSMT is a liquidity run read across a correlated triad: one or two of the triad run the previous quarter’s high or low, and the rest hold. Who takes the liquidity and who refuses is the information. ICT’s own SMT divergence is the parent idea, and in a 2017 video he described a turtle soup long inside an SMT setup 19:22. SSMT divergence covers it in full, and Correlated triads explains why the markets are read together.

Through the Quarter Sequence lens

In Quarter Sequence a run on liquidity only counts when it happens while a chain is live: three or more adjacent nested cycles sitting in the same quarter. Then one or two of the triad running the level while the rest hold is a QS SMT. The same run at a random hour is, in the words of What is Quarter Sequence?, “just noise between quarters”. Direction still comes from the True Opens, never from the chain.