Module 3G

The reversal setup: sweep-and-reversal playbook

Builds on 3F. You have the read, the arithmetic and the management rules. This is the first of the two setups they apply to.
Leads into 3H, the continuation playbook, which is the other half and the one that stops you fading drive days.

This curriculum's own. The sequence was introduced conceptually in 2F and becomes executable here.

Both playbooks do the same job

Both setups exist to locate the area where price expands in the intended direction, which is the higher-timeframe draw set by your bias. They differ only in the mechanism that produces the expansion.

Continuation, taught in 3H, is momentum accelerating through a level in the direction price is already being pulled. It works, and it works on momentum days.

This module is the other half. Instead of accelerating through a level, price sweeps the opposing liquidity and reverses off it. Trading that as a continuation means entering into the hand of whoever caused the sweep, and it is how the cleanest-looking losses get taken.

Reversal setup: Trading against the move that just ran a level, after a sweep traps the chasers.
Sweep-and-reversal: The signature. Drive into opposing liquidity, sweep the stops, flow turn at the level, expansion back toward the draw.
The sweep: A fast aggressive run through a liquidity pool that takes the resting stops and then fails.
The flow turn: The confirmation. Delta flips or diverges, absorption holds, price compresses, tape decelerates then re-accelerates the other way.
Structure shift as confluence: The candle change of character against the sweep. One signal among several, never a gate.

When a reversal is on the table

Four conditions. All of them, not some.

The intended draw points the other way. Your higher timeframe bias is opposite to the move currently running, or the opening type was a rejection-reverse, or an exhausted leg is running into a major level
Price is running into opposing liquidity. Buy-side above equal or prior highs, sell-side below equal or prior lows, a prior session value level, a round number. A pool worth sweeping
Cumulative delta is set up to flip or diverge. Price makes a new extreme into the pool while delta does not, or delta begins turning as the sweep finishes
The path back toward the draw is open. Evaluated the way 3D described it

Higher timeframe chart showing the draw pointing opposite to the move currently running into a liquidity pool. — Condition one. The draw is the context everything else hangs on.

When all four are present and price sweeps the level, the setup begins to develop. The trigger is the flow signature at the level, not the sweep itself.

The sequence, in four steps

This is not a candle pattern. It is a sequence of flow events, and it is readable in real time.

Step one: the drive into opposing liquidity

Price approaches and pushes into one of the pools you mapped, with what looks like a clean breakout or breakdown.

Order book showing aggressive orders driving price toward a mapped liquidity pool. — Aggression driving into the pool. **It looks committed, and that appearance is the trap.**

Step two: the sweep

Price runs through the pool, taking the resting stops, and then stalls. Fast and aggressive.

Price running through the liquidity pool, triggering resting stops, then stalling. — The stops fire. Those orders are somebody's fill.

This is the behaviour 1B named and 2D described. After a sell-side sweep in a bullish context, size has bought at a discount using those stops as the counterparty. After a buy-side sweep in a bearish context, size has sold into the buyers chasing the breakout.

The sweep alone is not the entry. It tells you the setup is potentially active. The flow turn confirms it.

Step three: the flow turn

This is the heart of the read, and it is the layer the candle chart cannot show you. After the sweep, you are watching for the move to fail.

Cumulative delta turning and absorption holding at the swept level while price compresses. — The turn. This is the entry window, not the candles that follow it.

Cumulative delta flips or diverges. After a sell-side sweep you expect it turning up. If delta is making new lows with the sweep, the move is real and your hypothesis is wrong
Absorption. Large resting orders defending the level, aggression hitting them and failing
Compression. Price balances at the level rather than continuing. Positioning being gathered before the expansion
Tape decelerates, then re-accelerates the other way. The sweep finishes, the tape slows, then speeds up in the reversal direction
Auction exhaustion. The auction tried and failed to find new participants in the sweep direction. 2A's language, doing work

No flow turn, no trade. A sweep without delta turning, without absorption, without compression is a sweep that will keep going.

Step four: the expansion

Price expands off the level back toward the draw. The trapped traders' stops fire and add fuel to the move.

Price expanding away from the swept level with cumulative delta making new extremes in the reversal direction. — The expansion. The trapped side becomes the fuel.

Cumulative delta makes new extremes in the reversal direction, aggression drives price away from the swept level, and a structure shift prints on the candles against the sweep.

That shift is the candles catching up to what the flow already showed. One confluence factor, not a required gate, and waiting for it to print often costs the move.

What invalidates the hypothesis

Any one of these and you stand down. They are not warnings to weigh, they are exits from the idea.

Cumulative delta makes a new extreme with the sweep. No divergence, no turn. The move is real
No absorption and no compression. Nothing is defending the level, so the sweep continues
Continuation volume after the sweep exceeds the rejection. The counter-aggression that should produce the reversal never arrives
Multiple sweeps both sides in quick succession. Noise, not a setup
Higher timeframe context agrees with the sweep direction. You are looking at a continuation. Switch playbooks
Price is accepted beyond the level, holding there and building value. The breakout is genuine and there is no reversal to trade

Which days this fits

Opening rejection-reverse day annotated to show where the reversal setup develops. — The natural home of this playbook.

The reversal is the natural fit for an open-rejection-reverse day. It is also valid on a rotational day at the edges of the range, fading a sweep of the extreme back toward value, and on a clean higher timeframe level being tagged for the first time against an exhausted intraday leg.

It is rarely valid on a drive or test-drive day. Those do not reverse off the first level, they accelerate through it.

So if your opening read was a drive and you find yourself hunting a reversal, the problem is not the setup, it is that you have gone looking for the playbook you prefer. Re-check the read. 2E called this the wrong combination killing more setups than the wrong analysis, and this is the specific case it meant.

The two playbooks side by side

	Reversal, 3G	Continuation, 3H
Hypothesis	A sweep traps participants and the market reverses	Momentum traps participants and the market accelerates through
Best day type	Open-rejection-reverse	Open-drive, open-test-drive
Flow signature	Delta flip, absorption, compression at the sweep	Delta trending, shallow pullback, acceleration through the level
Stop reference	Beyond the sweep extreme	Beyond the pullback or the broken level
Default target	Fixed, or the opposing liquidity pool	Fixed. Path extension often applies

Both use the same five-layer read. The difference is the hypothesis and the flow signature, not the framework.

Session open

Self-check

Grade yourself honestly

1. Price sweeps a pool you marked and cumulative delta makes a new extreme in the same direction. What is it?

A correct answer says a real move, not a trap, and stands aside. This is the single most important invalidation in the playbook, because it is the one that fires while the setup still looks textbook on the candles. If your answer looked for another factor to rescue it, that is the instinct this question exists to catch.

2. Why is the sweep not the entry?

A correct answer says the sweep only tells you the setup is potentially active, and that the flow turn is what confirms it. The deeper version: entering on the sweep is entering in the direction of the trap, which puts you in exactly the position the sweep was designed to fill against.

3. Your opening read said drive, and you have found what looks like a reversal at a level. What is most likely happening?

A correct answer is that you have gone looking for the playbook you prefer. Drive days accelerate through first levels rather than reversing off them. The honest move is to re-check the opening read, not to take the setup with a note that conditions were mixed.

4. What does a structure shift on the candles add, and what does waiting for it cost?

A correct answer is that it adds one confluence factor and that waiting for it costs the entry, because it is the slowest confirmation available and the flow already showed you the same thing.

If question 1 was not immediate

Go back to step three before you go anywhere near this live. Every other part of this setup can be read off a chart afterwards, but delta making a new extreme with the sweep is the one signal that separates the trade from the trap, and it is only visible while it is happening. A reversal playbook without that check is a plan for buying breakdowns.

One rep before you continue

Five sweeps, and tell them apart

In replay, find five sweeps of a marked liquidity pool. Deliberately include some that reversed and some that kept going. Do not filter for the ones that worked.

For each, write four things. Which pool got swept. What cumulative delta did at the sweep. Whether absorption or compression appeared. What happened next.

Then sort them into two piles: reversed, and kept going.

The whole edge of this playbook is telling those two apart before you know which it was, so the useful part of this rep is the ones you would have got wrong. Count them honestly.

What the next module does with this

3G is the first playbook and 3H is the second, and the reason there are two is worth stating once more plainly.

A trader who only knows the reversal takes their cleanest losses on drive days, because a drive day offers a textbook-looking level and never reverses off it. The continuation playbook is not an optional extra for people who want more setups. It is the thing that stops the reversal playbook being used where it does not belong.

Log the module

Where did you get stuck?

Not a test, and nothing is marked. This is the first executable setup in the curriculum, so what was unclear here matters more than usual. About a minute.