Most sweeps are noise

The depth threshold that separates a real liquidity grab from an ordinary wick, and the measurement showing that more trades means less edge.

Once you can see sweeps, you see them everywhere — and that is the problem. Most of what looks like a sweep is an ordinary wick. The difference between a strategy and a pattern-matching habit is a threshold, and where you set it is a trade between how often you trade and how good each trade is.

The depth threshold

Our engine only counts a sweep if price pushes through the level by a minimum distance before closing back inside. On gold that distance is currently 120 points ($1.20), which is roughly 0.3 of a typical 15-minute candle's range.

Below that, you are not looking at a liquidity grab. You are looking at noise that happens to touch a line you drew.

The measurement

The obvious temptation is to lower the threshold, because fewer restrictions means more trades and more trades feels like more opportunity. We tested exactly that. Same entry logic, same session, same stops and targets — only the required depth changed:

Quality rises steadily with depth: doubling the threshold from 80 to 160 points cuts the number of trades by 40% and lifts profit factor from 1.73 to 2.26. Each trade is worth more, and there are fewer of them.

So what is the threshold actually for?

Not survival — quality. At the wide stop the strategy tolerates shallow sweeps, but you pay for the extra trades in edge per trade. Where you sit on that curve is a real decision:

• Deeper (160–200): fewer, better trades. Higher profit factor, longer gaps between signals, more patience required.
• Shallower (40–80): roughly double the activity at a materially lower profit factor — and more trades also means more exposure to costs and to execution slippage that a backtest models imperfectly.

We run 120 because it sits where the curve is still steep — you gain a lot of quality for each step up, and give up a lot for each step down.

Why deeper sweeps are worth more

A plausible explanation, offered as reasoning rather than proof: a shallow poke through a level may not reach the bulk of the resting stops. If fewer orders were triggered, less forced flow occurred, and there is less reason for price to reverse hard. You have identified the location without the full event.

A deep push is evidence that something substantial was actually absorbed there.

What to take from this module

• Depth is what separates a sweep from a wick. Ours is 120 points on gold.
• Quality rises with depth: 80 points gives PF 1.73, 160 points gives 2.26.
• Frequency is a trade against edge per trade, not a free dial.
• A measured number is only true for the exact configuration it was measured on — including ours, including this table.