A false directional move designed to trap traders before the real move occurs in the opposite direction.
Deep Dive
The Judas Swing (named after the biblical betrayal) is a manipulative price move that occurs early in a trading session, typically opposite to the day's true intended direction. It's designed to trap traders and gather liquidity before the real move begins.
For example, a bullish Judas swing occurs when price moves lower early in the session (often during London open), triggering longs' stop losses and enticing shorts. Once sufficient liquidity is gathered, price reverses and trends higher for the rest of the session - the true direction.
Judas swings are a core component of the Power of Three concept, representing the manipulation phase. By waiting for the Judas swing to complete and identifying its direction, traders can position for the true move with high probability.
Why It Matters
Recognizing Judas swings helps avoid false breakouts and enter trades in the true direction.
Related Terms
- Killzones — Specific high-probability trading sessions when institutional activity is highest: London Open, New York Open, and London Close.
- Liquidity Sweep — Liquidity Sweep is a trading concept. Liquidity Sweep: A rapid, often volatile, price movement designed to "sweep" available liquidity (buy or sell orders) at a
- Power of Three — A market cycle concept consisting of three phases: Accumulation, Manipulation, and Distribution.