Stop Hunt / Liquidity Sweep Detector with Momentum Rating

The Stop Hunt / Liquidity Sweep Detector with Momentum Rating indicator identifies instances where price briefly exceeds previous structural pivot levels before reversing, providing a quantitative rating on the strength of the subsequent move. This tool is designed to highlight potential "stop hunts" or liquidity grabs, offering traders insight into market reversals and the momentum behind them.

Usage

The tool can be used to identify potential entry points following a fakeout or liquidity grab.

• Bullish Sweep: Occurs when price wicks below a recent Pivot Low but closes back above it. This suggests that sell-side liquidity was taken, and a bullish reversal may follow.
• Bearish Sweep: Occurs when price wicks above a recent Pivot High but closes back below it. This suggests buy-side liquidity was grabbed, potentially leading to a bearish reversal.

The Momentum Rating (Low, Medium, High) helps filter these signals. A "High" rating indicates a deep probe into liquidity followed by a strong recovery relative to current volatility (ATR), suggesting a more significant rejection.

Details

The indicator tracks the most recent Pivot High and Pivot Low based on the user-defined lookback periods. If a candle's wick breaks these levels but the candle close remains within the previous range, a "Sweep" is detected.

The Momentum Rating is calculated using two primary factors:

1. Wick Depth: How far the price penetrated beyond the pivot level, normalized by the Average True Range (ATR).
2. Recovery Strength: How far the price closed back inside the level relative to the depth of the wick.

The combination of these values results in a score between 0 and 1, which is then categorized into the rating displayed on the chart.

Settings

Pivot Settings

• Pivot Bars Left: The number of bars required to the left of a high or low to confirm a pivot.
• Pivot Bars Right: The number of bars required to the right of a high or low to confirm a pivot.

Momentum Rating

• ATR Length: The period used for the Average True Range calculation to normalize the sweep depth.

Visual Settings

• Bullish/Bearish Color: Customizes the colors of the labels and liquidity boxes.
• Label Size: Adjusts the size of the on-chart text labels.
• Show Momentum Rating: Toggles the visibility of the "Low/Medium/High" text on the sweep labels.

Alerts

• Enable Alerts: Toggles built-in alert triggers for completed sweeps.

FAQ

How do I access the Stop Hunt / Liquidity Sweep Detector with Momentum Rating?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

What causes a sweep box to disappear?

The indicator monitors active pivot levels; if a candle closes entirely beyond a pivot level without a reversal, that pivot is considered invalidated and the potential for a sweep at that specific level is reset.

What is the difference between a "Low" and "High" momentum rating?

A "High" rating implies that the price rejection was very sharp and moved significantly back across the pivot level relative to recent market volatility, whereas a "Low" rating suggests a marginal fakeout with less immediate follow-through.