Liquidity Pools Pro

The Liquidity Pools Pro tool automatically identifies equal high and low liquidity zones, scores them using a multi-factor strength model, and generates trade signals based on confirmed liquidity sweeps. This script provides a comprehensive trade execution framework, including risk-adjusted entry, stop-loss, and multi-stage take-profit levels.

Usage

The indicator is designed to map out where "smart money" liquidity resides and identify when price "grabs" that liquidity before reversing. It can be used as a standalone strategy or as a confluence filter for existing SMC (Smart Money Concepts) or price action methods.

• Zone Identification: Red boxes (SSL) represent equal highs where buy-side stops often sit, while green boxes (BSL) represent equal lows where sell-side stops reside.
• Sweep Trading: A signal fires when the price pierces a zone (the sweep) and then closes back inside the level (the confirmation). This filters out aggressive breakouts and focuses on failed breakout reversals.
• Risk Management: Upon a signal, the tool plots a complete trade plan. It features an automatic break-even (BE) mechanism that moves the stop-loss to the entry price once TP1 is reached.
• Dashboard Monitoring: Use the on-screen dashboard to track active pools, their strength scores (0-100), and the current state of open trades (Long, Short, or Flat).

Details

The indicator utilizes several advanced mechanics to ensure accuracy across different market conditions:

• Adaptive Pivot Detection: Unlike fixed-length pivot indicators, this tool adjusts its detection length based on market volatility (ATR). In high-volatility regimes, it filters noise by using longer lengths; in low-volatility regimes, it becomes more responsive.
• ATR-Based Equality Tolerance: To identify "equal" highs or lows, the script uses ATR units. This ensures that the definition of "equal" scales automatically whether you are trading BTC/USD or EUR/USD.
• 4-Factor Strength Scoring: Pools are weighted based on:
  1. Touches: More touches increase the pool's significance.
  2. Recency: Newer pools are weighted more heavily than old, decaying zones.
  3. Volume: Accumulated volume during every touch of the zone is added to the score.
  4. HTF Confluence: A bonus is applied if the zone aligns with a pivot on a higher timeframe (e.g., 4H or Daily).
• Position Lock: To prevent signal overlapping, the script blocks new signals while a trade is currently active.

Settings

Liquidity Detection

• Adaptive Pivot Length: Enables automatic adjustment of pivot sensitivity based on volatility.
• Equality Tolerance (×ATR): Sets the threshold for how close two points must be to be considered "equal."
• Max Pivot Lookback: Determines how far back the script searches for matching pivots.

Strength Scoring

• Min Strength to Display: Filters out weak liquidity zones from the visual interface.
• Strength Half-Life: Controls the speed at which old liquidity zones lose their strength score.
• Volume-Weighted Strength: Includes volume data in the liquidity scoring (recommended for Volume-enabled exchanges).

Sweep Signals & HTF

• Min Pool Strength for Signal: The minimum score required for a sweep to trigger a BUY/SELL alert.
• Require Body Reversal: Ensures the candle closes back within the zone before signaling.
• Enable HTF Confluence: Boosts zone strength if confirmed by higher timeframe data.

Risk Management

• Risk Preset: Choose between Conservative, Balanced, Aggressive, or Scalping modes to set ATR-based SL/TP multipliers.
• Break-Even After TP1: Automatically trails the stop-loss to the entry price after the first target is hit.

FAQ

How do I filter out low-quality signals? You can increase the "Min Pool Strength for Signal" setting. Raising this to 40 or 60 ensures that only multi-touch zones with high volume or HTF confluence trigger trades.

Does this indicator repaint? No. Signals are only generated on the close of a bar (confirmed state). While pivots require a small right-hand window for confirmation, the actual trade signals and liquidity sweeps do not change once the bar has closed.

How do I access Liquidity Pools Pro? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.