ICT Liquidity Sweep (ALERT)

The ICT Liquidity Sweep (ALERT) indicator is a specialized technical analysis tool that identifies potential reversal opportunities by detecting stop hunts and structure shifts based on Smart Money Concepts (SMC). It is specifically designed to highlight high-probability setups where price sweeps liquidity beyond recent swing levels before confirming a directional change.

Usage

The indicator can be used to identify trend reversals on various timeframes, though it is optimized for the 5-minute chart. Users should look for the following sequence:

1. Liquidity Sweep: The tool monitors price movement beyond recent highs or lows defined by the lookback period.
2. Break of Structure (BOS): Once a sweep occurs, the indicator waits for a price crossover or crossunder of recent local structure to validate the reversal.
3. Execution: Upon validation, the script displays entry levels with a fixed 2:1 risk-reward ratio. It automatically plots Entry, Take-Profit (TP), and Stop-Loss (SL) levels on the chart.
4. Time Filter: The tool includes an internal filter to ignore setups occurring between 8 PM and 12 AM New York time to avoid low-liquidity periods.

Details

The script construction focuses on institutional trading logic. The Liquidity Sweep detection looks back a specific number of bars to find historical "swing" points where liquidity (stop orders) typically resides. The Break of Structure component ensures that price is not just continuing the sweep but is actually shifting its momentum. The risk management logic calculates the stop loss based on the high or low of the sweep candle, ensuring that the invalidation point is technically sound.

Settings

• Liquidity Sweep Lookback: Determines the number of bars used to identify the recent highs and lows for potential liquidity sweeps.
• Show Entry/Exit Labels: Toggles the visibility of visual markers for entry signals and take-profit events.

FAQ

How do I interpret the entry labels?

Upward triangles indicate a long setup following a sweep of low liquidity and a bullish structure shift. Downward triangles indicate a short setup following a sweep of high liquidity and a bearish structure shift.

What is the default risk-reward ratio?

The indicator uses a fixed 2.0 Risk-to-Reward ratio, where the take-profit distance is twice the size of the stop-loss distance.

How can I access ICT Liquidity Sweep (ALERT)?

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