Liquidity Sweep + VWAP V2 Trend Filter, Presets

The Liquidity Sweep + VWAP V2 Trend Filter, Presets indicator provides a systematic framework for trading institutional liquidity sweeps by confirming reversals back toward fair value in alignment with the dominant trend. It automatically identifies previous day highs and lows as key liquidity zones, using a combination of VWAP for fair value confirmation and an EMA filter to ensure trades remain trend-congruent.

Usage

The script is designed for systematic backtesting and live analysis. A valid trade setup requires three components:

1. Trend Filter: The EMA determines the bias; long trades are only valid above the EMA, and short trades are only valid below it.
2. Liquidity Sweep: Price must trade beyond the Previous Day High (for shorts) or Previous Day Low (for longs).
3. Confirmation: For a long entry, price must close back above the Previous Day Low and above the VWAP. For a short entry, price must close back below the Previous Day High and below the VWAP.

Details

This tool models institutional behavior where "stop-runs" occur at obvious price levels before the market reverts to a mean or continues a larger trend. It utilizes ATR (Average True Range) for dynamic risk management, ensuring that stop losses and take profit targets adapt to current market volatility. The script also includes non-repainting logic for high-timeframe (HTF) levels to ensure backtesting accuracy.

Settings

Core Configuration

• Preset Profile: Select from pre-configured settings for Index, Forex, or Crypto markets. Choosing "Custom" allows for manual overrides.
• HTF for Previous Day Levels: Sets the timeframe used to calculate the liquidity levels (default is Daily).
• EMA Trend Filter Length: Adjusts the period of the Exponential Moving Average used for trend detection.

Risk Management

• ATR Length: The lookback period for calculating market volatility.
• Stop Loss (ATR Multiplier): Sets the exit distance for losing trades based on ATR.
• Take Profit (ATR Multiplier): Sets the target distance for winning trades based on ATR.

Filters & Control

• Use Session Filter: Enables a specific time window for valid entries (e.g., US regular session).
• Max 1 Trade per Day: Limits the strategy to a single entry per day to avoid overtrading in choppy conditions.

FAQ

How do I use the presets?

You can select a profile like "Index" or "Forex" in the settings. This will automatically update the EMA length, ATR multipliers, and session times to values optimized for those specific asset classes.

What timeframes are recommended?

While the script can work on many periods, it is specifically optimized for the 5-minute and 15-minute timeframes where intraday liquidity sweeps are most prominent.

How can I access Liquidity Sweep + VWAP V2 Trend Filter, Presets?

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