Liquidity Sweep of Candle & Swing 3.0

The Liquidity Sweep of Candle & Swing indicator identifies high-probability reversal points by detecting price wicks that penetrate key levels before closing back within the range. This tool highlights where institutional liquidity has been tapped, signaling potential failed breakouts and upcoming price shifts.

Usage

The Usage section describes how the script can be used to spot institutional order flow patterns. A sweep is defined as price moving beyond a previous high or low but failing to sustain that momentum, indicated by a close inside the previous range.

• Bullish Sweep: Look for price to wick below a previous low (candle or swing) but close above it. This indicates a "Stop Run" where sell-side liquidity was cleared.
• Bearish Sweep: Look for price to wick above a previous high but close below it. This indicates buy-side liquidity was cleared before a potential reversal.
• Targeting: The indicator automatically plots a "TGT" level (the opposite side of the sweeping candle) and a 50% wick level, providing logical areas for profit-taking or trade management.

Details

The indicator monitors two primary sources of liquidity:

1. Candle Sweeps: Focuses on the immediate previous candle's High/Low.
2. Swing Sweeps: Focuses on pivot points defined by the lookback period.

When a sweep occurs, the tool generates a visual structure including:

• SWH/SWL Line: The level that was swept.
• Target (TGT) Line: The objective for the potential reversal.
• 50% Wick Line: Often used as a secondary entry or invalidation point in ICT/SMC strategies.
• Relocation Logic: If a new sweep occurs before a target is hit, the indicator dynamically updates to focus on the most recent liquidity event.

Settings

Mode

• Mode: Choose between "Candle Sweep", "Swing Sweep", or "Both" to determine which levels trigger detection.
• Swing Lookback: Defines the number of candles required to identify a pivot high or low.

Filter

• Show Bullish Sweeps: Toggles the visibility of long-side liquidity sweeps.
• Show Bearish Sweeps: Toggles the visibility of short-side liquidity sweeps.

Display

• Label Text: Switch between "Sweep" or "Fail to Close" (FTC) for visual labels.
• Box: Toggles the highlighted zone between the swept level and the candle extreme.
• Swept X Line: Displays a red 'X' at the exact level where liquidity was grabbed.
• Extension Length: Controls how far the TGT and SWH/L lines extend into the future.

FAQ

How do I interpret the 50% line? In many smart money concepts, the 50% mark of a long wick (Consequent Encroachment) acts as a significant support or resistance level. A close beyond this level often suggests the sweep is becoming a valid breakout instead of a reversal.

What causes a sweep to disappear? The indicator includes "Cleanup" settings. Sweeps can be set to delete after a certain number of bars or once the target (TGT) has been reached to keep the chart clean.

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