Liquidity Hunter

The Liquidity Hunter indicator identifies institutional liquidity zones and real-time liquidity sweeps to help traders spot potential market reversals based on Smart Money Concepts (SMC).

Usage

The Usage section describes how the script can be used to identify areas where institutional "smart money" may interact with retail orders.

• Identifying Liquidity Pools: The indicator automatically marks Equal Highs (EQH) and Equal Lows (EQL). These areas represent clusters of stop-loss orders from retail traders, acting as "pools" of liquidity that institutional players often target.
• Monitoring Liquidity Sweeps: When price action pushes beyond an established EQH or EQL zone and then reverses, the indicator labels the zone as "Swept (✓)". This visual confirmation suggests a "liquidity grab" has occurred, which is often a precursor to a significant trend reversal.
• Daily Highs and Lows: The tool automatically plots the previous day's high (PDH) and low (PDL). These levels serve as critical intraday liquidity benchmarks where sweeps frequently take place.
• Entry Confirmation: Traders can use the sweep signals in conjunction with Market Structure Shifts (MSS). After a sweep is detected, a break in the internal structure often provides a high-probability entry point, with stop-losses typically placed just beyond the sweep high or low.

Details

The Liquidity Hunter utilizes a pivot-based algorithm to detect structural swing points. The core logic hinges on the relationship between current price action and historical pivot levels:

• Swing Detection: The script uses a configurable swing length to determine significant peaks and troughs. Higher swing lengths filter out minor price fluctuations, focusing on more dominant structural levels.
• Equality Threshold: To define "Equal" highs or lows, the script calculates the percentage difference between new pivots and existing active liquidity lines. If the difference is within the user-defined threshold, the zone is categorized as a high-probability liquidity pool (EQH/EQL).
• Sweep Engine: The engine constantly checks if the current bar's high or low has breached active liquidity lines. Once a breach occurs, the line is updated visually to indicate it has been neutralized (Swept), and the script stops tracking that specific level to reduce chart clutter.

Settings

הגדרות נזילות מבנית (Structural Liquidity Settings)

• אורך קצוות מבנה (Swing Length): Sets the number of bars required to confirm a pivot high or low. Increasing this value results in more significant, longer-term liquidity levels.
• רגישות לתקרה/רצפה כפולה (%) (Equality Threshold): Determines the maximum percentage deviation allowed for two price points to be considered "equal" (EQH/EQL).

הגדרות ויזואליות - כיתוב (Visual Settings)

• גודל הכיתוב (Label Size): Adjusts the size of the text labels on the chart (Small, Medium, Large).
• צבע נזילת קנויה (Highs): Sets the color for Buy-Side Liquidity (BSL) levels.
• צבע נזילת מכורה (Lows): Sets the color for Sell-Side Liquidity (SSL) levels.
• צבע נזילות כפולה (EQH/EQL): Sets the color specifically for equal high and low zones.

FAQ

How do I identify a valid liquidity sweep? A valid sweep occurs when the price moves past a dashed liquidity line and the indicator updates the label to "Swept (✓)". This indicates that orders sitting at that level have been triggered.

Can I use this on any timeframe? Yes, the Liquidity Hunter is designed to work on all timeframes, though it is most commonly used on the 15M, 1H, and 4H charts for identifying SMC-based trade setups.

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