ICT IRL & ERL Zones-v2

The ICT IRL & ERL Zones indicator identifies and visualizes Internal Range Liquidity and External Range Liquidity levels to help traders pinpoint key zones where price is likely to react, consolidate, or reverse.

Usage

The ICT IRL & ERL Zones tool is used to monitor price action relative to local extremes. By identifying the highest high and lowest low of a specific period, traders can anticipate "liquidity runs" where price moves toward these levels to collect orders.

• IRL (Internal Range Liquidity): These levels represent the high and low of the lookback period. Price often oscillates within this range or treats these boundaries as immediate support and resistance.
• ERL (External Range Liquidity): These levels are set at a fixed buffer (50 ticks) outside the IRL. These zones are significant for identifying potential liquidity sweeps or "stop runs" where price briefly pushes beyond the range before reversing or accelerating.
• Reversals and Continuations: Traders often look for price to reach an ERL level and show signs of rejection for a mean-reversion trade back toward the IRL, or a breakout above ERL for trend continuation.

Details

The script utilizes a lookback mechanism to determine the trading range. It calculates the ta.highest and ta.lowest values over a user-defined number of bars.

The Internal Range Liquidity (IRL) is plotted directly at these high/low extremes. The External Range Liquidity (ERL) is calculated by adding or subtracting a buffer value (50 times the symbol's minimum tick size) to the IRL levels. This creates a secondary boundary that accounts for the typical "hunting" of liquidity that occurs just outside visible structural points. The indicator also includes built-in alert conditions for price crossings of any of the four liquidity lines.

Settings

• Lookback Range: Defines the number of candles used to calculate the highest high and lowest low of the range.
• Show IRL (Internal Range Liquidity): Toggles the visibility of the internal high/low lines and the shaded background fill.
• Show ERL (External Range Liquidity): Toggles the visibility of the external green (high) and red (low) liquidity lines.

FAQ

What is the difference between IRL and ERL?

IRL (Internal Range Liquidity) represents the actual price extremes of the recent range, while ERL (External Range Liquidity) represents the area slightly beyond those extremes where liquidity rests in the form of stop-loss orders.

How do I adjust the sensitivity of the zones?

You can adjust the "Lookback Range" setting. A smaller lookback will create more reactive, tighter zones, while a larger lookback will identify more significant macro liquidity levels.

How can I access the ICT IRL & ERL Zones?

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