Liquidity Sweep Mechanical Model

The Liquidity Sweep Mechanical Model indicator provides an automated trading framework designed to capture market reversals following session liquidity grabs, market structure shifts (MSS), and Fibonacci retracements.

Usage

The tool is designed for mechanical trade execution based on specific price action sequences. It primarily monitors the highs and lows established during the Asian session to identify potential liquidity pools for the London and New York sessions.

A valid setup follows these steps:

1. Liquidity Sweep: Price must exceed the Asian session high (for shorts) or drop below the Asian session low (for longs).
2. Market Structure Shift (MSS): Following the sweep, price must break the most recent fractal high or low to confirm a shift in momentum.
3. Fibonacci Retracement: Once the MSS is confirmed, the tool calculates a 0.618 retracement level. An entry is signaled when price returns to this level.
4. Targeting: The model defaults to a fixed 1:3 risk-to-reward ratio.

Details

The indicator utilizes session-based logic to define "target" liquidity zones. By tracking the Asian session range, it establishes clear boundaries where stop orders are likely clustered.

The Market Structure Shift is identified using recursive fractal tracking (Pivot Highs/Lows), ensuring that the break of structure is significant rather than a minor price fluctuation. When a pending setup is detected, the indicator dynamically updates the Fibonacci entry level based on the expansion of the current price leg before the retracement occurs.

Settings

Sessions

• Asia Session: Defines the time range for the initial liquidity range (default: 00:00-08:00).
• London Session: Defines the first active trading window for sweeps (default: 08:00-12:00).
• NY Session: Defines the second active trading window for sweeps (default: 13:00-17:00).
• Timezone: Set the timezone offset to align session times with your broker (default: UTC+2).

FAQ

How do I access Liquidity Sweep Mechanical Model?

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

What timeframes are best for this model?

While it can be applied to various timeframes, it is most commonly used on the 1m, 5m, or 15m timeframes to capture intraday session moves.

Can I change the risk-to-reward ratio?

In the current version, the model is hardcoded for a mechanical 1:3 RR to maintain consistency with the specific mechanical strategy it implements.