Strong Liquidity Zones

The Strong Liquidity Zones indicator finds price levels where liquidity pools and ranks them using a power-scoring system to distinguish between high-probability reversal zones and levels likely to break. It detects three independent footprints—swing pivots, wick-rejection traps, and volume spikes—merging overlapping detections into confluence clusters scored from 0–10 based on measurable quality factors.

Usage

The tool is designed to identify "confluence clusters" where multiple liquidity signatures align at the same price level. Traders can use these zones for two primary strategies:

• Fading Reversion (Mean Reversion): Focus on zones rated STRONG (7-8) or ELITE (9-10). When price enters these high-grade zones, look for rejection wicks and enter on a reversal close back out of the zone.
• Trend Continuation (Breakouts): Targets zones rated WEAK or MEDIUM. If price closes decisively through these levels on expanding volume, it suggests a trend continuation rather than a reversal.

The Live Level Dashboard provides a real-time leaderboard of all active zones, displaying their tier, side, exact price, and distance from the current market price in both percentages and pips.

Details

The indicator utilizes a Power-Ranking System (0–10) calculated from four primary factors:

• Confluence: The number of unique detection points stacking at a specific level.
• Diversity: Higher weight is given to levels confirmed by different types of footprints (e.g., a pivot point combined with a volume spike).
• Strength: Measures volume relative to the baseline, wick dominance, and range expansion.
• Recency: Newer levels are weighted more heavily than stale, historical data.

To maintain chart clarity, the script uses Confluence Clustering to group nearby detections into a single, strength-weighted zone rather than plotting dozens of individual lines. Origin-Anchored Zones ensure each band is visually tied to the specific price action that created it.

Settings

• Detection Settings: Adjust pivot length, wick dominance ratios, and volume spike multipliers to control how the three liquidity footprints are identified.
• Clustering Settings: Define the ATR-based tolerance for merging levels, lookback depth, and the minimum power rank required for a zone to be displayed.
• Zone Settings: Customize the ATR period for zone width, maximum active zones, and minimum separation between levels.
• Display: Toggle active/breached zones, customize label sizes, and adjust "Elite" zone highlighting (thicker borders and brighter colors).
• Dashboard: Configure the position (Top Right, Bottom Left, etc.), maximum rows, and text size of the on-chart leaderboard.
• Theme: Select custom colors for bullish, bearish, and breached zones.

FAQ

How do I interpret the "ELITE" tag?

An ELITE (9-10) rating is rare and signifies that all three types of liquidity footprints (pivots, wicks, and volume) have converged on a strong, recent level, representing a high-probability area for price reaction.

What happens when a zone is breached?

Once price decisively closes through a zone, it is considered breached. Depending on your settings, these zones will either disappear or change color to show a "flipped" level that may now act as the opposite support/resistance.

How can I access this script?

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