Liquidity Sweeps

The Liquidity Sweeps indicator identifies and visualizes potential liquidity sweeps by tracking significant pivot levels where large orders may be concentrated. It helps traders spot instances where price briefly breaches a support or resistance level before reversing, signaling a potential shift in market momentum.

Usage

The indicator identifies "Buy Side" and "Sell Side" liquidity sweeps based on historical pivot points.

• Buy Side Liquidity Sweep: Occurs when price moves above a established pivot high resistance line but fails to close above it, ending the bar back within the previous range. This is often viewed as a bearish reversal signal.
• Sell Side Liquidity Sweep: Occurs when price moves below a pivot low support line but fails to close below it, ending the bar back above the level. This is often viewed as a bullish reversal signal.

Pending liquidity areas are displayed as horizontal lines originating from green (pivot low) or red (pivot high) points. When a sweep is detected, the indicator provides a real-time label ("Buy Liquidity Sweep" or "Sell Liquidity Sweep") and triggers an alert.

Details

The script uses a lookback/lookahead period defined by the "Pivot Length" to identify significant swing highs and lows. These points are projected forward as liquidity levels.

A sweep is technically defined when the high (for resistance) or low (for support) exceeds the pivot level, but the closing price remains on the original side of that level. If price closes beyond the level, the liquidity is considered "grabbed" or broken, and the line is removed without a sweep signal.

Settings

• Pivot Length: Determines the number of bars used to identify pivot highs and lows (Left and Right length).
• Maximum Lines: Sets the maximum number of support and resistance lines to be displayed on the chart simultaneously.
• S & R Colors: Allows customization of the colors used for support and resistance lines.
• Line Width: Adjusts the thickness of the liquidity level lines.

FAQ

How do I access Liquidity Sweeps?

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 a sweep and a breakout?

A breakout occurs when the price closes beyond a level, suggesting continuation. A sweep occurs when price penetrates the level but closes back inside it, suggesting a false breakout or "stop run."

Can I change the sensitivity of the detections?

Yes, by adjusting the "Pivot Length" setting. A smaller length will identify more frequent, short-term liquidity levels, while a larger length will focus on major structural levels.