I Tested 10,000 Liquidity Sweep & Found a Trading Strategy | Trading for Beginners

Summary

The presenter reports backtesting 10,000 liquidity-sweep setups using five years of MT5 historical data, totaling 397,300 bars. Swing highs and lows were marked on the 4-hour chart, with entries evaluated on the 5-minute chart. The presenter says the 4-hour level timeframe performed better than a 1-hour alternative.

Strategies tested

Four entry models were compared after a liquidity sweep:

• Engulfing candle: Enter after a bullish or bearish engulfing pattern forms.
• FVG market entry: Enter as soon as a fair value gap (FVG) forms, without waiting for a retest.
• FVG tap: Wait for an FVG to form, then enter when price returns to it.
• IFVG: Enter using an inverse fair value gap after the sweep.

Reported results

• Immediate FVG entry: At a 1:2 risk-reward ratio and 1% risk per trade, the reported win rate was 34.9%. The presenter says the strategy lost money and capital was eventually exhausted after roughly 1,600 trades. Increasing the risk-reward target did not fix the result.
• FVG tap: Produced only 174 trades and no significant profit. The presenter says that increasing risk to 2% or using a 1:3 target did not materially improve the results.
• IFVG: At 1:2 and 1% risk per trade, the reported win rate was 36.7%, with a five-year return of 84.7%. A 1:4 target lowered the win rate to 25% without producing especially strong returns. The presenter favored 1:2 over higher targets.
• Engulfing strategy: In the final comparison, using $10,000 in starting capital, 1% risk per trade, and a 1:2 target, the reported win rate was 48.6%. It had the lowest drawdown among the compared strategies and was presented as the strongest overall. The presenter says it was up about 32% after 100 trades and 70% after 200 trades. Restricting entries to wick sweeps reportedly improved returns, though no figure was given.

Strategy framework

1. On the 4-hour chart, mark a prior high and low, optionally using the Williams Fractals indicator.
2. Move to the 5-minute chart and wait for price to sweep one of those levels—that is, move beyond it and then return across it.
3. After a downward sweep, look for a bullish engulfing pattern. After an upward sweep, look for a bearish engulfing pattern.
4. Enter on the candle after the engulfing pattern.
5. Place the stop just beyond the sweep’s extreme, with some margin, and target a 1:2 risk-reward ratio.
6. The backtest included both wick and body sweeps. The presenter notes that wick-only results were better but suggests judging both manually.

The presenter stresses that strategies can have losing streaks and advises thorough backtesting rather than abandoning a tested approach after only 10–30 trades. The reported results are historical backtest figures and do not guarantee future performance. Some figures in the subtitles—particularly those concerning initial capital—are garbled, so the results should be treated as the presenter’s reported numbers.

Assets, instruments, and disclosures

• Bitcoin, Ethereum, gold, and crypto are mentioned in a promotion for Delta Exchange, but the backtest examples do not clearly specify which instrument was tested.
• No explicit “not financial advice” disclaimer appears in the subtitles.
• The presenter promotes a Delta Exchange referral link and offers a subscription or private-channel benefit for opening an account through it.

Presenter/source: Neeraj Joshi, Neeraj Joshi YouTube channel.