Liquidity Sentiment Profile (Auto-Anchored)
Aug 28, 2023
The Liquidity Sentiment Profile (Auto-Anchored) is an advanced charting tool designed to provide traders with insight into market dynamics by combining PRICE and VOLUME data over various anchored periods. This tool highlights the liquidity distribution and market sentiment at specific price levels, offering a comprehensive view into potential market movements. This version enhances upon the original Liquidity Sentiment Profile by allowing traders the flexibility to select from numerous anchoring periods, ensuring greater adaptability to different trading strategies.
Liquidity in trading refers to the ease with which orders can be executed at desired price levels without causing significant price disruption, thereby facilitating smoother transactions.
How to Trade the Liquidity Sentiment Profile (Auto-Anchored)?
The Liquidity Sentiment Profile (Auto-Anchored) combines liquidity and sentiment profiles to provide a detailed overview of market activity. The profile's right side showcases the distribution of trading activity across varying price levels, while the left side highlights market sentiment, allowing traders to identify key areas such as support and resistance, supply and demand zones, and consolidation zones. By using color coding, traders can easily recognize significant price levels and potential trading opportunities.
The purpose of the Liquidity Sentiment Profiles is to define value areas based on significant price levels. This capability allows traders to identify and capitalize on recurring value areas within a single profile's range.
Level of Significance Line
This line provides insight into changing price levels with the highest traded activity, making it easier for traders to follow ongoing price developments (also referred to as the developing POC - Point of Control).
Buyside & Sellside Liquidity Zones
These zones highlight liquidity levels, commonly known as Supply and Demand Zones, guiding traders to potential areas of interest for buy or sell orders.
Customizing the Liquidity Sentiment Profile (Auto-Anchored)
Liquidity Sentiment Profile Settings
- Anchor Period: This option sets the indicator resolution based on user selection.
- Fixed Period: Applicable when "Fixed Range" is selected under Anchor Period, defining the profile's duration.
- Swing Detection Length: For 'Swing High' or 'Swing Low' settings, this determines the period by defining the length needed for swing level detection.
Liquidity Profile Settings
- Liquidity Profile: Toggle to show or hide the Liquidity Profiles.
- High Traded Nodes: Set thresholds and colors for high traded nodes.
- Average Traded Nodes: Define color options for average traded nodes.
- Low Traded Nodes: Manage thresholds and color options for low traded nodes.
Sentiment Profile Settings
- Sentiment Profile: Activate or deactivate the visibility of the Sentiment Profiles.
- Bullish Nodes: Choose color settings for Bullish Nodes.
- Bearish Nodes: Select color preferences for Bearish Nodes.
Buyside & Sellside Liquidity Zones Settings
- Buyside & Sellside Liquidity Zones: Control the visibility of these zones.
- Buyside Liquidity Nodes: Customize colors for Buyside Liquidity Nodes.
- Sellside Liquidity Nodes: Select colors for Sellside Liquidity Nodes.
Additional Configuration Options
- Level of Significance: Toggle visibility for the Level of Significance Line.
- Price Levels, Color: Manage the visibility and color of Profile Price Levels.
- Number of Rows: Define how many rows each profile histogram displays. Note that high values may hit Pine Script™ drawing object limits, reducing historical profile visibility.
- Profile Width %: Adjust the histogram row width relative to profile length.
- Profile Range Background Fill: Control visibility of the Profile Range Background Fill.
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FAQ
What is the Liquidity Sentiment Profile (Auto-Anchored)?
This is a trading indicator that integrates price and volume data to depict liquidity and sentiment distributions over specific anchoring periods, aiding in strategic trading decisions.
How can I access the Liquidity Sentiment Profile (Auto-Anchored)?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
What are Buyside & Sellside Liquidity Zones?
These zones are key market areas representing potential buy and sell orders, reflecting supply and demand dynamics that can signal trading opportunities.
Trading is risky and many will lose money in connection with trading activities. All content on this site is not intended to, and should not be, construed as financial advice. Decisions to buy, sell, hold or trade in securities, commodities and other markets involve risk and are best made based on the advice of qualified financial professionals. Past performance does not guarantee future results.
Hypothetical or Simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, including, but not limited to, lack of liquidity. Simulated trading programs in general are designed with the benefit of hindsight, and are based on historical information. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
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