How do you know when a liquidity sweep is valid?

Two sweeps can look identical and resolve in opposite directions. The filter is the close. A valid bullish sweep trades below the swing low and then closes back above it. The failure to hold below the level is the information.

Once price closes back above the swept low, three things are confirmed on the chart at once: the sell stops below the low were flushed at a loss, new shorts who sold the breakdown are trapped, and the buy limits that sat under the low are already in profit. All three groups now push the same direction.

If price breaks the low and closes below it, there is no failure and there is no trade. That single distinction, close back inside versus close beyond, is the difference between trading a sweep and getting swept.

Sources: Secret to Liquidity Sweeps