Liquidation Screener

The Liquidation Screener indicator is a technical tool designed to project potential liquidation levels based on historical price extremes or volume-weighted averages. It helps traders identify key price zones where high-leverage positions are likely to be forced out of the market.

Usage

The Liquidation Screener can be used to identify potential support and resistance zones derived from estimated liquidation prices of long and short positions. Traders can select from various calculation modes to suit their strategy:

• Long Bottom/Short Top: Projects short liquidations from recent highs and long liquidations from recent lows.
• Long Top/Short Bottom: Reverses the logic to project levels from opposite extremes.
• Top/Bottom Price Liquidations: Focuses solely on projecting levels from the highest or lowest points within the lookback period.
• VWMA Mode: Uses a Volume Weighted Moving Average as the baseline for liquidations, representing a broader market average position.
• Custom Price: Allows users to input a specific price level to see where liquidations would occur relative to that anchor.

Example: A trader looking for "liquidity grabs" might look for price to pierce the "Short 100x" or "Short 50x" levels before considering a reversal, as these levels often represent areas where stop-losses are clustered.

Details

The indicator calculates liquidation points by applying specific multipliers to a chosen anchor price (the "Swing High/Low" or "VWMA"). These multipliers correspond to common leverage tiers used in crypto markets, such as 100x, 50x, 25x, 10x, and lower.

The script features "Kill Zones" (highlighted areas), specifically the PRZ (Potential Reversal Zone) and the 2-3x leverage zones, which often act as magnet areas for price action. By tracking these levels, users can visualize the "pain points" for leveraged participants.

Settings

• Highest/Lowest Lookback: The number of bars used to determine the swing high and low anchors.
• Custom Price Levels: The manual price input used when the "Custom Price" mode is active.
• Mode: Selects the calculation logic (VWMA, Extremes, or Custom).
• VWMA Length: The period for the Volume Weighted Moving Average calculation.
• VWMA Source: The price data (e.g., Close, HL2) used for the VWMA.
• Track Price?: Enables or disables horizontal line extensions for the projected levels.
• Offset: Shifts the plots forward or backward on the chart.

FAQ

How do I access the Liquidation Screener?

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

What do the colored zones represent?

The red zones represent estimated short liquidation clusters, while green zones represent estimated long liquidation clusters. The darker shaded areas highlight high-probability "Kill Zones."

Can I use this for non-crypto assets?

While liquidation levels are most prominent in crypto due to high leverage, the tool can be used on any asset to identify mathematical extensions and volatility-based support/resistance levels.