CHOCH & Liquidity Sweep Detector

The CHOCH & Liquidity Sweep Detector indicator provides a comprehensive framework for identifying institutional liquidity sweeps and market structure shifts. It specifically highlights price action where a wick exceeds a prior swing point before closing back within the range, signaling potential reversals confirmed by a subsequent Change of Character (CHOCH).

Usage

The indicator can be used to identify high-probability reversal zones by combining liquidity analysis with trend confirmation.

• Liquidity Sweeps: Look for the 💧 label. A bearish sweep occurs when price wicks above a swing high but closes below it, while a bullish sweep occurs when price wicks below a swing low but closes above it.
• CHOCH Confirmation: Once a sweep occurs, the script monitors for a break in structure. A "BULLISH CHOCH" signal appears after a bearish sweep when price breaks the recent structure high. A "BEARISH CHOCH" signal appears after a bullish sweep when price breaks the recent structure low.
• Dashboard Integration: Utilize the bottom-right dashboard to quickly check the current market trend (Bullish/Bearish/Neutral), sweep status, and whether a "Setup Ready" condition has been met.
• Multi-Timeframe Alignment: For improved accuracy, users may wait for higher timeframe trend alignment (e.g., 1H or 4H) before taking entries on lower timeframe signals.

Details

The script functions by first identifying pivot points based on the "Swing Detection Length." It then monitors price movement relative to these pivots. A sweep is validated if price exceeds the pivot by a user-defined threshold percentage but fails to maintain that level on a closing basis. The Change of Character logic requires a prior liquidity sweep to have occurred, ensuring that the structure break is contextualized within a reversal narrative rather than a simple trend continuation.

Settings

Detection Settings

• Swing Detection Length: Determines the lookback period used to identify swing highs and lows for liquidity levels.
• Liquidity Sweep % Threshold: Sets the minimum percentage distance price must travel beyond a high/low to be considered a potential sweep.

Visual Settings

• Show Swing Points: Toggles the display of "SH" (Swing High) and "SL" (Swing Low) labels.
• Show Liquidity Sweeps: Enables or disables the visibility of the 💧 sweep labels and dashed level lines.
• Show CHOCH Signals: Controls the visibility of the large colored CHOCH labels and entry alerts.
• Show Market Structure Lines: Toggles the display of dotted lines representing current structure highs and lows.

Colors

• Bullish CHOCH: Customizes the color for bullish signal labels.
• Bearish CHOCH: Customizes the color for bearish signal labels.
• Liquidity Sweep: Sets the color for liquidity sweep labels and lines.
• Structure Lines: Sets the color for the horizontal market structure markers.

FAQ

How do I use the CHOCH & Liquidity Sweep Detector?

Identify a liquidity sweep (💧 label), wait for a Change of Character label to appear, and consider entries on a retest of the broken structure level.

What is the "Setup Ready" indicator on the dashboard?

This status turns "YES" when both a liquidity sweep and a valid CHOCH have occurred within a recent period, signaling a completed setup.

How can I access this script?

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