This is a real lesson from Futures · Course 1 of the SWTM Academy: lesson 1 of module 7, with its narrated video and quick check. Inside the Academy it comes after six modules on contracts, candles, timeframes, structure and the three key levels.
Module 07 · The sweep · Lesson 1 of 3
What a sweep is, shown at PDH
A sweep happens when price trades through an important level but fails to hold beyond it. At PDH, the question is: can price hold above?
The example days
ES (an illustration): PDH 7,850.00 · PDEQ 7,820.00 · PDL 7,790.00. NQ (also an illustration): PDH 31,200.00 · PDEQ 31,080.00 · PDL 30,960.00. Both were set up in Lesson 6.1 and are used in every example below.
Where we are in the sequence
In Module 6 you marked the three levels and learned to do nothing while price is between them. This module covers what happens when price reaches a level and pushes through it. Here is the full core sequence, so you can see where the sweep sits:
- Mark PDH, PDEQ and PDL.
- Wait for price to reach one of them.
- Look for a sweep: price moves through the level.
- Wait for rejection or failure. Do not enter just because price swept.
- Wait for the 30-minute candle to close. The close determines whether the level has failed.
- Once confirmed, zoom into the 5-minute chart to examine the structure around the rejection.
- Set a logical stop based on the relevant wick or structure.
- Calculate position size from the stop distance and your maximum risk.
- Set the target from previous structure or the next key level.
- Execute only if the setup meets the rules. Otherwise: no trade.
This module is steps 3 and 4. Module 8 is step 5.
What a sweep is
Definition
A sweep occurs when price trades through an important level but fails to hold beyond it. It represents a potential failure or rejection.
Two parts make a sweep:
- Through: price trades beyond the level. At PDH, that means price trades above it.
- Fails to hold: price cannot stay beyond the level and comes back to the other side.
Notice the word potential. Price trading through a level is only the first part. Whether it really failed is decided later, by the 30-minute close.
How far is a sweep
One tick beyond the level is enough. You do not need a minimum distance, because the sweep is only the first part: the 30-minute close decides whether it failed.
The PDH sweep, step by step
Use the ES example day (an illustration): PDH 7,850.00, PDEQ 7,820.00, PDL 7,790.00.
Price rises through the morning and your PDH alert fires at 7,850.00. Price keeps going and trades up to 7,856.00, six points above PDH.
What do you do? You do not short automatically. You wait.
Price trading above PDH is not a reason to sell. It is the moment to ask the one question that matters at PDH:
You do not know the answer yet. Maybe buyers are strong enough to stay above. Maybe the sellers who defended PDH yesterday are still there and will push price back down. You find out from the 30-minute close.
On the ES example day, price trades to 7,853.00, three points above PDH. What do you do?
Two possible outcomes
When the 30-minute candle that swept PDH closes, there are two possibilities.
Outcome 1: the candle closes back below PDH. Say it closes at 7,846.00. Price went above PDH, could not stay there, and finished the period back below the line. The candle leaves a long upper wick above PDH: a selling tail (Module 3). The 30-minute close back below PDH confirms the rejection.
Outcome 2: the candle closes above PDH. Say it closes at 7,854.00. Price went above PDH and stayed there. There is no failure, no rejection, and therefore no trade.
| Close of the sweep candle | What it means | What you do |
|---|---|---|
| Back below PDH (example 7,846.00) | Price could not hold above: rejection confirmed | Move on to the next step of the sequence |
| Above PDH (example 7,854.00) | Price held above: no rejection | No trade. Keep waiting |
A 30-minute candle trades above PDH and closes above it. What does that show?
What a sweep says about buyers
Go back to the two questions from Module 6. At PDH: "What happened here previously?" Sellers defended price and the market turned down. "Are the sellers still there?" The sweep is how the market answers.
When price trades above PDH, buyers are pushing into the area sellers defended yesterday. If the candle then closes back below PDH, buyers pushed through and could not stay. Their push failed. The sellers were still there.
That failed push is what this course trades. Not the push itself, and not the touch of the line: the failure, confirmed by the close.
Transcript
Price reaches the previous day's high, and trades above it. You don't sell. You wait. Can price hold above the level? The thirty-minute candle closes back below it. Buyers pushed through, and couldn't stay. That's a sweep, confirmed by the close. At the low it's the mirror: through the level, then a close back above. At the midpoint, the same three beats. Through, fail, close back. If the close stays beyond the level, there is no rejection, and no trade.
Keep asking
"Is price sweeping one of my three key levels and rejecting it?" A sweep without a rejection is not a setup. If no: do nothing.
Practice
- Exercise 7.1: find five past PDH sweeps on ES or NQ and mark the sweep, the 30-minute close and the wick.
Key points
- A sweep: price trades through an important level but fails to hold beyond it. It is a potential failure or rejection.
- At PDH you do not short automatically when price trades above. You wait.
- The question at PDH: "Can price hold above PDH?" A 30-minute close back below PDH confirms the rejection.
- A close above PDH means no rejection and no trade.
- A rejected PDH sweep shows buyers pushed through and could not stay.
SWTM Academy
That was 1 of 89 lessons.
Four courses on ES and NQ: the futures setup, reading the auction, and dealer gamma. Narrated lessons, an exam after every module, and a certificate per course.
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