Liquidity Sweep Probability

The Liquidity Sweep Probability indicator maps equal highs and equal lows, tracks sweeps through those levels, detects reclaim behavior, and records historical continuation samples to provide context on liquidity-based price action. It is designed for traders seeking to observe where price builds internal liquidity and how it reacts once those levels are tested.

Usage

The Usage section describes how the script identifies key market structures and handles subsequent price action.

Identifying Equal-Level Zones The indicator detects potential liquidity by comparing confirmed pivots. If two pivot highs or lows are within an ATR-based tolerance of each other, an "Equal High" or "Equal Low" zone is plotted. These zones act as reference points for where market participants may have placed stops.

Sweep and Reclaim Detection A liquidity sweep occurs when price trades beyond the zone boundary but closes back within it. The script then monitors a "Reclaim Window" (configurable in bars). A successful reclaim occurs when price closes back through the opposite side of the zone (e.g., closing below the bottom of an equal high zone after sweeping the top).

Historical Continuation Samples After a reclaim event, the script tracks whether price reaches a specific ATR-based target within a set window of bars. These outcomes are recorded as "samples."

• Successful Sample: Price reached the target distance before the window expired.
• Unsuccessful Sample: Price failed to reach the target within the bar limit.

Details

The script utilizes a state-machine logic to track the life cycle of every liquidity zone, transitioning from "Equal" to "Swept," "Reclaimed," or "Broken."

The Probability Panel calculates a descriptive score (not a predictive forecast) based on the current chart's data. It blends the observed sample success rate, the distance of the sweep relative to ATR, the age of the zone, and whether a reclaim has occurred. This provides a compact reading of the current market context relative to historical behavior on that specific symbol and timeframe.

Settings

Swings

• Swing Pivot Length: Sets the sensitivity for pivot detection.
• Equal-Level Tolerance: The ATR fraction used to determine if two pivots are close enough to be considered "equal."
• Zone Padding: The ATR fraction added to the top and bottom of zones for visual padding.
• ATR Length: The lookback period used for all volatility-based calculations.

Behavior

• Reclaim Window: The maximum number of bars allowed for price to close back through a zone after a sweep.
• Continuation Window: The maximum number of bars allowed for price to reach the target distance after a reclaim.
• Continuation Distance: The ATR-based target used to measure the success of a reclaim event.
• Maximum Zones Per Side: Limits the number of active boxes and lines on the chart to maintain performance.

Visual

• Zone Extension Bars: Determines how far into the future the zones and midlines are projected.
• Probability Panel: Toggles the visibility of the on-screen dashboard.

FAQ

How do I interpret the "Chance" percentage in the dashboard? The percentage is a descriptive score derived from historical sample rates on the current chart and current event factors like zone age and sweep depth. It is intended to reflect how current price action aligns with previous successful setups.

What is the difference between a "Sweep" and a "Break"? A sweep occurs when price penetrates a zone but fails to maintain that momentum, closing back inside. A break occurs when price trades through the zone and continues without a reclaim, indicating the liquidity was consumed rather than defended.

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