Turtle soup: fading a liquidity sweep
Lesson 11 · 6 min read · By DT Terminal
Trade the failed break of an old high or low. The setup comes from Connors and Raschke's Street Smarts (1995); ICT uses the name loosely.
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Where the name comes from
Turtle soup is a reversal trade after price breaks an old high or low, takes the liquidity resting there, and fails to hold beyond it.
It is not an ICT invention. The name comes from Laurence Connors and Linda Bradford Raschke's book Street Smarts (1995). It pokes fun at the Turtles, traders who followed a 20-day breakout system: turtle soup trades the breakouts that fail.
ICT later borrowed the name for his own liquidity-sweep reversals. This lesson gives you both versions, so you can test each as a written rule.
The original rule
The Street Smarts buy rule, on daily bars, as the course research summarises it:
- Today makes a new 20-day low.
- The prior 20-day low is at least 4 sessions old.
- An entry stop sits back above the old low, so you are only filled if price trades back up through it.
The entry stop is the clever part: you never buy the break, only its failure, once price is back above the level. Upside down, the same idea fades a failed new 20-day high.
Example 1 below follows these steps on sample gold. Any stop or target beyond the entry is your own rule.
How ICT uses the name
ICT uses "turtle soup" for any liquidity sweep of an obvious old high or low: buy-side liquidity above highs, sell-side liquidity below lows, as in Liquidity the ICT way. The basics of sweeps are in Day 13, liquidity.
| Street Smarts | ICT use | |
|---|---|---|
| The level | The prior 20-day low or high | Any obvious old high or low: a session low, the previous day’s high, equal lows |
| The trigger | An entry stop back through the old level | A close back inside, usually with a market structure shift |
| Timeframe | Daily bars | Any timeframe |
| Rules | Fixed and written | Discretionary |
Discretion is where the risk is. A rule you can write down, like the original, is a rule you can test. The ICT use only becomes testable once you write your own version of each row.
Failed, or still breaking
Every turtle soup starts as a break that looks real. Only what happens next tells them apart.
Turtle soup
A failed break, against one still breaking
- The old low or high
- Bullish shift
- Bearish shift
A liquidity sweep of an old low
faded with a long
A liquidity sweep of an old high
faded with a short
Turtle soup
breaks the old low, closes back above it
Liquidity sweep, then shift
the ICT use: then a close above the last lower high
Still breaking
no close back above yet: too early to fade
Real break
closes below and keeps going
The original rule, worked
Sample candles, not a real session.
Worked example
Example 01: XAUUSD D1: the Street Smarts rule
The worked example, with every number walked through, is in the app.
Step by step
The lowest low of the last 20 sessions is 3,962.40, made 11 sessions earlier, so it passes the 4-session test. A day trades down to 3,951.80, a new 20-day low. The next day trades back up through the buy stop, filling the order, and closes at 3,978.40. With a stop just under the new low, at 3,950.80, the risk is 11.600 per ounce. This is an illustration, not a trade to take.
The ICT version, worked
Sample candles, not a real session, in New York time (EDT).
Worked example
Example 02: GBPUSD M15: a liquidity sweep of the London low, ICT style
The worked example, with every number walked through, is in the app.
Step by step
The old low forms at 03:30 during the London session. The 08:45 liquidity sweep reaches 1.27020 and closes back above at 1.27190. The 09:30 candle closes at 1.27440, above the last lower high of 1.27380.
New York and London change their clocks on different dates, so for about three weeks a year the London open lands an hour later on a New York clock.
Fading too early, and testing it
The classic mistake is fading a breakout before it has failed, while price still closes below the old low. Stops cluster beyond obvious highs and lows, and triggering them can speed a move up: a fast run through the level, not a reversal.
So test both versions on the same market, and log the breaks that kept going too.
Replay old lows bar by bar
XAUUSD on D1, marking each new 20-day low and whether price traded back through the old one.Make the failure a written condition
Go deeper
The evidence on stops comes from research by the Federal Reserve Bank of New York: stops cluster beyond obvious highs and lows, and triggering them can speed a move up. It does not say the run will reverse.
Test the original entry stop against the ICT close-and-shift version. In the replay, check each old low's age, and note whether price traded back through it within the next session. Then try the ICT version on M15.
Check yourself
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