Institutional Candle Scanner — Imbalance & Order Blocks

The Institutional Candle Scanner — Imbalance & Order Blocks indicator identifies high-conviction institutional market activity by detecting large body candles supported by significant volume spikes. It aims to highlight potential market imbalances, order blocks, and liquidity grabs to help traders spot institutional presence in real-time.

Usage

The script can be used to identify key areas of interest where smart money may be entering or exiting positions. Traders can look for the following signals:

• INST BUY / INST SELL: These labels appear when a candle has a body larger than the Average True Range (ATR) multiplied by a user-defined threshold, accompanied by a significant volume spike.
• Compression to Expansion (C→E): This signal identifies periods where the market was previously consolidating (small bodies) before an institutional impulse occurs, signaling a breakout from range.
• Liquidity Grab (LG): These diamonds highlight instances where the price has wicked beyond previous swing highs or lows and reversed, suggesting a stop-run or liquidity hunt.
• Order Blocks: When an institutional signal is triggered, the indicator automatically draws a box around the previous candle's range, highlighting potential supply or demand zones for future retests.

Details

The indicator relies on a combination of price action volatility and volume analysis. It uses ATR to normalize what constitutes a "large" body relative to recent market conditions, ensuring the scanner adapts to different timeframes and assets. Volume is compared against a Simple Moving Average (SMA) to confirm that the price movement is backed by increased participation.

The "Compression to Expansion" logic specifically looks for the average body percentage of the range over a set number of bars. If the market is tightly compressed and then explodes with institutional volume, it suggests a high-probability trend continuation or reversal.

Settings

Main Calculation Settings

• ATR length: The lookback period used to calculate the Average True Range for volatility measurement.
• Large body > X * ATR: The multiplier applied to the ATR; candles exceeding this size are considered large bodies.
• Volume SMA length: The lookback period for the Simple Moving Average of volume.
• Volume spike > X * SMA(vol): The multiplier applied to the volume SMA; volume must exceed this level to trigger a signal.

Expansion & Logic Settings

• Compression bars (max): The number of preceding bars checked for consolidation.
• Max body % of range in compression: Defines the maximum allowable body size relative to the candle's total range during a compression phase.

Visual Settings

• Show order blocks: Toggles the drawing of boxes on the candle preceding an institutional move.
• Show liquidity grabs: Toggles the detection and labeling of wick-based liquidity sweeps.

FAQ

How do I access the Institutional Candle Scanner — Imbalance & Order Blocks?

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

What is the difference between an INST signal and a C→E signal?

An INST signal is a standalone institutional candle based on size and volume. A C→E (Compression to Expansion) signal is a more specific setup that requires the INST signal to happen immediately following a period of low-volatility consolidation.

Can I use this for any timeframe?

Yes, the indicator uses ATR-based calculations which automatically adjust to the volatility of whichever timeframe you are currently viewing.