When two or more swing highs form at the same price level, stop orders from short sellers cluster above them. Price often sweeps these 'equal highs' to harvest liquidity before reversing. Trade the reversal after the sweep.
- Identify 2+ swing highs at approximately the same price (< 0.3% apart)
- Price rallies up and pushes slightly above the equal highs
- Sharp rejection: wick forms above, close back below equal high level
- Enter short on close of the rejection candle
- Stop: above the sweep wick's extreme high
- Target: next notable swing low, or opposite equal lows if present
The closer together the equal highs are in price and time, the stronger the liquidity pool above them. Two equal highs formed within 3-5 candles are magnets; two highs from different sessions weeks apart are much weaker targets.