Liquidity Sweep Signals

The Liquidity Sweep Signals indicator identifies market liquidity raids followed by structural shifts to highlight high-probability reversal entries. It automates the detection of sweeps at swing highs and lows, requiring a post-sweep Fair Value Gap (FVG) and a subsequent retrace to confirm entry validity.

Usage

The Usage section describes how the script can be used to identify reversal setups following institutional liquidity grabs. The script operates through a three-step validation process:

• Liquidity Sweep: The indicator monitors swing highs (Buy-Side Liquidity) and swing lows (Sell-Side Liquidity). A sweep is identified when price wicks beyond these levels but closes back within the established range.
• FVG Confirmation: Following a sweep, the tool waits for an impulse move that creates a Fair Value Gap. Entries are only considered if the FVG forms after the sweep candle.
• Retrace Entry: An entry signal is triggered when price retraces into the FVG zone. The script defaults to the midpoint of the FVG for the entry price.

Visual aids such as Green (TP) and Red (SL) boxes are drawn automatically. These boxes dynamically close once the target, stop loss, or time-based expiry is reached to maintain a clean chart interface.

Details

The script is constructed to avoid "same-bar" entries, ensuring that a setup has sufficient time (at least 2-3 candles) to develop. It employs a pivot detection algorithm to track liquidity levels and utilizes an ATR-based buffer for stop-loss placement to account for market volatility.

The indicator also includes a built-in statistics table that tracks the performance of the last $N$ signals, providing real-time data on win rates, successful trades, and expired setups. To align with institutional order flow, the script includes session filters for London and New York trading hours.

Settings

Detection

• Swing Length: Adjusts the sensitivity of the pivot detection for identifying swing highs and lows.
• Max Liq Levels: The maximum number of historical liquidity levels to track simultaneously.

Risk

• SL ATR Buffer: Sets a multiplier for the Average True Range to provide additional space for the stop loss beyond the sweep extreme.
• R:R Ratio: Defines the reward-to-risk ratio for the automated Take Profit level (default is 2.0).
• Expire setup after N bars: Determines how long the indicator will wait for an FVG retrace before canceling the pending setup.

Stats & Sessions

• Stats: Last N Signals: Defines the lookback period for calculating the win rate in the dashboard.
• Show setup markers: Toggles the visibility of "SSL▲" and "BSL▼" labels when a sweep is detected.
• London/NY Session: Allows users to define specific time windows to filter for signals during high-volume periods.

FAQ

How do I use the session filters?

The session filters allow you to restrict signals to specific times, such as the London or New York sessions, ensuring the strategy focuses on periods with the highest liquidity and volatility.

Why did a sweep occur without a signal?

A signal requires three components: a valid liquidity sweep, the formation of a Fair Value Gap after the sweep, and a price retrace into that gap. If the FVG is never filled or the setup expires before the retrace, no entry will be marked.

How can I access this tool?

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