ICT Turtle Soup (Liquidity Reversal)

The ICT Turtle Soup (Liquidity Reversal) indicator identifies potential market reversals by detecting liquidity sweeps above or below key swing levels based on Inner Circle Trader (ICT) concepts. It highlights "trap" scenarios where price briefly breaches a swing high or low before snapping back, signaling a high-probability reversal opportunity.

Usage

The indicator is primarily used to spot false breakouts in liquid markets. Traders can use it to identify when retail stop-losses have been triggered (liquidity grabbed) and price is ready to move in the opposite direction.

• Bullish Turtle Soup: Occurs when price sweeps below a prior swing low but manages to close back above it. This suggests a "stop run" on long positions followed by buying pressure.
• Bearish Turtle Soup: Occurs when price runs above a prior swing high but closes back below it. This indicates a "liquidity grab" of short stops followed by selling pressure.

Examples of usage include monitoring intraday timeframes like the 5-minute or 15-minute charts during session extremes. Traders often look for these signals to align with higher-timeframe order blocks or fair value gaps (FVG) for higher-probability setups.

Details

The script functions by identifying swing highs and lows using a user-defined lookback period. Once a swing point is established, the script monitors subsequent price action.

• Detection: If the current bar's high exceeds the prevHigh but the close remains below it, a bearish signal is triggered.
• Confirmation: Conversely, if the current bar's low drops below prevLow but the close is above it, a bullish signal is triggered. This "sweep and close back" logic is the core of the Turtle Soup pattern, ensuring that the breakout is indeed a "fakeout" rather than a sustained trend continuation.

Settings

• Swing Lookback: Determines the number of bars on either side of a candle required to define it as a swing high or low. A higher value identifies more significant, longer-term levels.
• Show Labels: Toggles the visibility of descriptive text labels next to the signal icons.
• Label Size: Adjusts the size of the text labels on the chart.
• Bullish Turtle Soup Color: Customizes the color for bullish reversal signals.
• Bearish Turtle Soup Color: Customizes the color for bearish reversal signals.

FAQ

How do I use the ICT Turtle Soup (Liquidity Reversal)?

You can use it to spot liquidity sweeps at key swing levels. When a signal appears, it indicates price has trapped traders outside a range and is likely to reverse.

What timeframes work best for this indicator?

While it works on all timeframes, it is highly effective on intraday charts (5m, 15m, 1h) for identifying session liquidity grabs.

How can I access this tool?

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