Liquidity Sweeps [LuxAlgo]The Liquidity Sweeps indicator detects the presence of liquidity sweeps on the user's chart, while also providing potential areas of support/resistance or entry when Liquidity levels are taken.
In the event of a Liquidity Sweep a Sweep Area is created which may provide further areas of interest.
🔶 USAGE
A Liquidity Sweep occurs when the price breaks through a liquidity level (further referred to as LqL ), after which the price returns below/above the liquidity level , forming a wick.
The script provides 2 options when this can happen:
A wick passes a LqL after which the price quickly returns.
First the closing price breaks through a LqL . After a while, the price retests the LqL and forms a wick in the opposite direction.
The examples above show a bullish and bearish scenario of "a wick passing through an LqL where the price quickly comes back". This type of Liquidity Sweep is represented by a dotted line.
The following example shows a broken LqL , where the price retests the Liquidity zone and bounces back.
Instead of a dotted line, this type of Liquidity Sweep is represented by a dashed line.
When a Liquidity Sweep takes place, this is indicated by highlighting the "wick- LqL " distance. This distance is also the basis for the Sweep Area (see next sub-section). A small 3-bar long dotted line starts from the opposite wick as an extra aid to determine potential support/resistance/entry, ...
Colors can be set in the settings (here yellow and aqua blue instead of default colors for clarity).
🔹 Sweep Areas
The distance between the LqL and the maximum limit of the wick forms a Sweep Area , which can provide a potential support/resistance or entry zone.
These examples show both types of Liquidity Sweeps , followed by a box indicating the Sweep Area .
When the Sweep Area is mitigated or a certain amount of bars has passed (Settings - 'Max bars'), the boxes will no longer be updated.
In this case, the 'Trigger' label shows the bar where the high crossed a LqL , after which a red box starts between LqL and high.
The low of the 'Trigger' bar is the starting point of a short dotted line. Next to the 'Trigger bar' the high touches the Sweep Area before returning, providing a potential short entry. One bar further, another entry opportunity presents itself when the price breaks the small dotted line.
In the following bullish example, not only do we see opportunities when the LqL has been swept, but the following Sweep Area provides some potential entries.
The small green dotted lines also act as a guide where the price breaks above, then forms a small range, after which the price continues in an upward direction.
Here, the initial trigger on the left forms a Sweep Area that is quickly broken. However, the small green line provides a potential entry area later on. The price moves in a short channel before breaking above the LqL (green dashed line), providing more potential entries. Price retests this LqL , and goes below this level. The price remained around the previously formed channel, after which the price resumed its upward trend.
🔶 SETTINGS
🔹 Liquidity Sweeps
Swings: Period used for the swing detection, with higher values returning longer term Liquidity Levels .
Options:
- Only Wicks: Only detects a Liquidity Sweep when a wick sweeps a previous wick
- Only Outbreaks & Retest: Only detects a Liquidity Sweep when the price breaks a Liquidity Level , returns & retests the Liquidity Level , and forms a wick in the opposite direction.
- Wicks + Outbreaks & Retest: Both options can be detected.
🔹 Sweep Area
Extend: Enables/Disables extension of the Sweep Area boxes.
Max Bars: Limit the extension to a certain number of bars.
Color Sweep Area box.
Liquiditysweep
Sweep institutionalThis indicator focuses on identifying "SWEEPs" based on taking liquidity at highs and lows. The application of the SWEEP strategy is highly determinant in the Swing points, as they serve as the target of our operations.
ALERTS INCLUDED
🔹Example of Strategy Application
1.-Create the BULLISH SWEEP.
2.-You can enter LONG.
3.-If it is a BULLISH SWEEP, take a long with a SWING HIGH target (2-3 pips up).
4.-If it is a BULLISH SWEEP, place your SL behind the SWEEP (2-3 pips).
(This example is bullish, but it would be the same in a bearish setup, applying everything in the opposite way)
t's very crucial for the strategy to reference SWING POINTS, as these points will be our take profit and stop loss points.
The strategy is based on identifying a SWEEP. After this, we can look for trading opportunities with targets on the opposite side of the fractal. Remember, if you decide to enter, the Stop Loss should be placed protected by the Sweep, and the Take Profit should be set at the opposite Swing, as seen in the example.
Use this STRATEGY IN TIMEFRAMES GREATER THAN 30M. If you decide to use it in timeframes <30M, there's a higher probability of encountering false SWEEPs (the most optimal are 1h & 4h)
🔹Use
The Sweep strategy involves identifying potential trades based on the creation of a "SWEEP" (liquidity grab) at the Swing High or Swing Low. Below is an example of a bearish opportunity after taking liquidity from a Swing High with a wick and no candle body closing above it.
🔹Details
As you have seen, it indicates the surpassing of a high without the candle body, this is called a “SWEEP.” Each time this occurs, the price is likely to surpass the opposite SWING High/Low. The following example will show more clearly how it works in both bullish and bearish scenarios.
🔹Configuration
-Cooldown period: is the length of the operating Range line
-Swing detection: determines the points to be used as SL and TP protection
Bullish/Berish Sweep
-Line Width: size of the line
-Line Style: design type
-Color
Session Breakout/Sweep with alertsThis indicator is based on popular London breakout strategy. but as I noticed that it don't work good with breakouts so I made it to be used as reversal entries as well. By default the timing is set for asian session but you can change it according to your need.
Use as breakout
Use as liquidity sweep
Note:
On some pairs the timing changes automatically (I don't know why), if you face this issue , go to settings and set the timing accordingly and save it as templet so that you don't have to change it every time you load the chart with timing issue.
I hope you guys find it useful. Do share your though and feedback in comments.
Liquidity PeaksThe "Liquidity Peaks" indicator is a tool designed to identify significant supply and demand zones based on volumetric analysis. It analyzes the volume profile within a specified lookback range to pinpoint the most volumetric point and draw corresponding zones on the price chart.
The 𝐋𝐢𝐪. 𝐏𝐞𝐚𝐤𝐬 indicator utilizes volume data to identify key supply and demand areas on the price chart. By examining the volume profile within a defined lookback range, it highlights three distinct zones: liquidity grab, volume containment, and the most volumetric point.
Zones and their meanings:
Liquidity grab (Orange box): This zone represents a price level where there is a significant swipe of the previous demand zone within the volume range. It indicates a potential shift in market sentiment and serves as a key supply or demand area.
Volume containment (Gray box): This zone displays the area of volume contained before the peak in volume. It provides insights into the range where buying or selling pressure was concentrated, highlighting potential support or resistance levels.
Most volumetric point (Light blue box): This zone represents the point within the lookback range that exhibits the highest volume. It signifies a significant area of market interest and indicates a potential supply or demand level.
Adjustable options:
Adjust liquidity Grab: This option allows you to adjust the size of the boxes. When enabled, the box size is set to twice the size of the high or low of the candle's wick. This adjustment enhances the visibility and accuracy of identifying swipes at specific price levels.
Show origin: Enabling this option ensures that the liquidity boxes are drawn from the wick they were created from. This provides a clear visual reference to the specific candle and highlights the liquidity levels associated with it.
Utility:
The 𝐋𝐢𝐪. 𝐏𝐞𝐚𝐤𝐬 indicator is a valuable tool for traders and investors seeking to identify significant supply and demand zones in the market. By analyzing volume data and drawing corresponding zones on the chart, it helps to pinpoint areas where buying or selling pressure is likely to emerge.
Traders can utilize this information to identify potential support and resistance levels, plan their entries and exits, and make more informed trading decisions. The liquidity grab zones can act as potential reversal or breakout points, while the volume containment zones and most volumetric points provide insights into areas of high market interest.
It is important to note that this indicator should be used in conjunction with other technical analysis tools and indicators to confirm trading signals and validate market dynamics.
Example Charts:
Stophunt WickAcknowledgement
This indicator is dedicated to my friend Alexandru who saved me from one of these liquidation raids which almost liquidated me.
Alexandru is one of the best scalpers out there and he always nails his entries at the tip of these wicks.
This inspired me to create this indicator.
What's a Liquidation Wick?
It's that fast stop-hunting wick that stophunts everyone by triggering their stop-loss and liquidation.
Liquidity is the lifeblood of stock market and liquidation is the process that moves price.
This indicator will identify when a liquidity pool is getting raided to trigger buy or sell stops, they are also know as stop-hunts.
How does it work?
When market consolidates in one direction, it builds up liquidity zones.
Market maker will break out of these consolidation phases by having dramatic price action to either pump or dump to raid these liquidity zones.
This is also called stop-hunts or liquidity raids. After that it will start reversing back to the opposite direction.
This is most noticeable by the length of the wick of a given candle in a very short amount of time and the total size of the candle.
This indicator highlights them accordingly.
Settings
Wick and Candle ratio works with default values but finetune will enhance user experience and usability.
Wick Ratio: Size of the wick compared to body of a candle.
Adjust this to higher ratio on smaller timeframe or smaller ratio on bigger timeframe to your trading style to spot a trend reversal.
Candle Ratio: The size of the candle, by default it is 0.75% of the current price.
For example, if BTC is at 20,000 then the size of the candle has to be minimum 150.
This can be fine tuned to bigger candle size on higher time frames or smaller for shorter timeframe depending on the trade type.
How to use it?
This indicator will identify when a liquidity pool is getting raided to trigger buy or sell stops, they are also know as stop-hunts. It can be used of its own for scalping but there are also a good few indicators which would most definitely help to confluence bigger timeframe trades.
Scalp
This indicator shows the most chaotic moments in price action; therefore it works best on smaller timeframes, ideally 3 or 5 minute candle.
- Wait for the market to start pumping or dumping.
- Current candle will change colour (Bullish/Bearish).
- Enter trade as soon as price starts to reverse back.
- Place the stop-loss outside of the current candle.
- Wait for the Liquidation Wick to appear as confirmation.
Price is very chaotic during a liquidity stop-hunt raid but there is a saying:
"In the midst of chaos, there is also opportunity" - Sun-Tzu
Since this is a very high risk, high reward strategy; it is advised to practice on paper trade first.
Practice until perfection and this indicator would be the perfect bread and butter scalp confirmation.
Fair Value Gap
FVG strategy is the most accurate in conjunction with this indicator.
Normally price would reverse after consuming fair value gaps but often it's difficult to know when and where.
This indicator would identify those crucial entry points for reverse course direction of the price action.
Support and Resistance
This indicator can also be used in conjunction with support and resistance lines.
Generally the stophunt will go deep below the support or spike much further up the resistance lines to liquidate positions.
Bollinger Bands
Bolling Bands strategy would be to wait until the price breaks out of the band.
Once the wick is formed, it would be an ideal entry point.
Script change
This is an open-source script and feel free to modify according to your need and to amplify your existing strategy.
