The Core Playbook: Mastering the Sweep-to-Mean Reversal
If you only learn one setup using Elev8+, make it this one.
The Sweep-to-Mean is the backbone of institutional intraday trading. It is built on a simple premise: Liquidity is harvested at the extremes (the Sweep), and inventory is then rotated back to fair value (the Mean). This guide combines the entry signals, risk models, and targeting rules into a single execution playbook.
The "Rubber Band" Logic
Think of VWAP (Volume Weighted Average Price) as an anchor. When price stretches too far away and hits a Sweep Level, the rubber band tension peaks. Elev8+ identifies the "snap" point. Your trade captures the move back to the anchor.
Phase 1: The Setup (The 3-Step Sequence)
A valid Sweep-to-Mean trade always follows this specific order. If one step is missing, there is no trade.
Price must aggressively run into a Tier 1 Level (PDH, PDL, or Weekly Extreme).
Note: If price is just chopping in the middle of nowhere, ignore it.
A candle pierces the level but closes back inside the range. This creates a long wick, proving that breakout traders are trapped.
An Elev8+ Signal (Triangle or LS) prints on the rejection candle.
Phase 2: Choosing Your Weapon (Triangle vs. LS)
You will see two types of signals on your chart. Knowing which one to trust is critical.
Role: Raw Detection.
Frequency: High.
Use Case: Triangles are great for awareness, but they require you to manually verify the level.
Rule: Never take a triangle unless it is touching a line.
Role: Premium Confirmation.
Frequency: Low.
Use Case: These signals have stricter internal filters for volatility and volume.
Rule: If you are a beginner, only trade LS signals for your first month.
Phase 3: Execution (The Entry & Stop)
Once the signal candle closes, you must execute without hesitation.
- The Entry: Enter on the Open of the very next candle. Do not wait for a retrace; you might miss the snap-back.
- The Stop Loss (Hard Rule): Place your stop 1-2 ticks beyond the Sweep Wick.
Why this stop placement?
If price breaks the Sweep Wick, the "Trap" has failed and the breakout is real. You want to be out immediately. This gives you a tight, defined risk on every trade.
Phase 4: The Exit (Pay Yourself)
Do not hold for a home run. We are trading a rotation, not a trend.
- Target 1 (The Mean): Take 75% of your position off at VWAP. This is where the "Rubber Band" tension reaches zero.
- Target 2 (The Runner): Leave 25% to see if price rotates to the other side of the range (e.g., PDL to PDH).
The 2R Minimum
Before entering, look at the distance to VWAP. Is it at least 2x your risk? If your Stop is 20 points away, but VWAP is only 10 points away, skip the trade. The math doesn't work.
Phase 5: When to ABORT (The Safety Filters)
Even if the signal prints, stand down if you see these "Red Flags":
- The "Trend Day" Rail: If the EMA Ribbon is steeply angled and price has not touched VWAP in hours, do not fade it. The rubber band might snap you.
- The "Ugly Wick": If the rejection candle has a huge body and a tiny wick, it's not a trap. It's indecision.
- The "News Bomb": If it is 8:30 AM or 2:00 PM EST, wait 15 minutes.
Summary: The Playbook Checklist
- Price hits a Core Six Level (PDH/PDL).
- Candle pierces & closes back inside (The Wick).
- LS or Triangle confirms the reversal.
- Risk Check: Distance to VWAP is > 2x the distance to the Wick.
- Execute: Enter next open, Stop at Wick, Target VWAP.
This strategy is repeatable, objective, and mathematically sound. Stop trying to catch every move. Master the Sweep-to-Mean, and you master the market's daily rhythm.