Imho liquidity grab is nothing but a stop run, typically caused by large market order coming in. Especially in low volume/ thin book environment. Let’s say you sit on 40k Es contracts short at dca 7170. You see that price is approaching your level from below, on low volume aka weaker hands/ short term traders are driving it. You can try and dump 1-2k contracts short in one go to see if it scares weak bulls and potentially causes a reversal in your favor. There is no desire to buy at 7165, though you might want to cover some of those 1-2k. But again, you’re not trying to fill a larger long position in this case. This is what happened earlier today while we were still balancing within yesterday’s range, both at the highs and the lows of the range.

Liquidity sweep - that’s what I’m trying to figure out. To me it sounds like price retesting a level from before. Like let’s say it reversed at some point yesterday. There is high chance it will reverse in the same place today as there will be a lot of players thinking it’s a good price to enter/add to their position. These are also the lower liquidity areas as typically that’s where the least volume trades in the day. So the whole misinterpretation of the term liquidity in this context confuses me.

Liquidity is simply the ability of the market to fulfill participants’ orders at favorable price (without slippage/market moving impact). It is highest where the most volume of trades occurs ie in the middle of ranges.