ICT Liquidity Sweeps

The ICT Liquidity Sweeps indicator tracks liquidity zones in the market to identify areas where institutional stop-losses and pending orders are clustered. By highlighting these buyside and sellside liquidity levels, the tool helps traders anticipate price manipulations and potential reversals or continuations.

Usage

The Usage section focuses on identifying "liquidity grabs" where price briefly breaches a key level before reversing.

• Buyside Liquidity (BSL) Sweeps: Occur when price spikes above a resistance level (pivot high). This often indicates that institutional "Smart Money" has triggered buy stops and stop-losses before driving the price lower.
• Sellside Liquidity (SSL) Sweeps: Occur when price drops below a support level (pivot low). This suggests that sell stops have been collected before a move higher.

A powerful application is combining this tool with Market Structure Shifts (MSS). Traders can wait for a liquidity sweep to occur, then look for an MSS in the opposite direction for a high-probability trade entry.

Details

The script uses a pivot-based method to detect significant swing highs and lows. Once a pivot is confirmed based on the Pivot Length, a horizontal line is projected to the right. These lines represent future liquidity targets.

To manage chart clarity, the indicator includes a "Hit Action" logic. When price interacts with a level, the script can either delete the line or change its style (Dotted/Dashed) to signify that the liquidity at that level has been "swept" or neutralized.

Settings

Pivot Left Right Length

• Pivot Length: Determines the number of bars required to the left and right to confirm a pivot high or low. Higher values identify more significant, long-term liquidity zones.

Liquidity Settings

• Maximum Lines: Limits the number of active liquidity lines displayed on the chart to prevent clutter.

Colors

• Buyside liquidity: Sets the color for resistance/buyside liquidity levels.
• Sellside liquidity: Sets the color for support/sellside liquidity levels.
• Line Width: Adjusts the thickness of the liquidity lines.

Additional

• Line Extension: Sets how many bars to extend the liquidity lines to the right of the current bar.
• Action when line is hit: Determines the visual behavior when price touches a level (Dotted, Dashed, or Delete).

FAQ

How do I use the ICT Liquidity Sweeps indicator?

You can use it to find areas where price is likely to reverse after taking out "retail" stop losses. Look for a line to change style or disappear, then wait for price action confirmation to enter a trade.

Can I set alerts for liquidity sweeps?

Yes, the indicator includes built-in alert conditions for both Buyside and Sellside sweeps, allowing you to be notified the moment a liquidity level is breached.

How can I access ICT Liquidity Sweeps?

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