# Rubber Band Liquidity Signals

Rubber Band Liquidity Signals is an indicator on [Vela](https://vela.luxalgo.com/chart), our next-generation charting platform, written in Pine Script®.

Rubber Band Liquidity Signals maps a four-stage cycle - trend, consolidation, liquidity sweep, continuation - directly onto your chart. ATR-scaled boxes define each range, sweep lines flag the stop run through its boundary, and a B label with a yellow V confirms the snap back in trend direction. Built for breakout traders who want the traps filtered out first.

- Indicator in the LuxAlgo Library, by LuxAlgo, published Jun 15, 2026.
- Access: free.
- Concepts: [Liquidity Sweep](https://www.luxalgo.com/library/concept/liquidity-sweep/) (primary), [Disparity Index](https://www.luxalgo.com/library/concept/disparity-index/)
- Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=cmqfhgmku000jla04rujf1p8y
- Page: https://www.luxalgo.com/library/indicator/rubber-band-liquidity-signals/

**Rubber Band Liquidity Signals** trades one specific sequence: a strong trend, a tight consolidation, a [liquidity sweep](https://www.luxalgo.com/library/concept/liquidity-sweep/) through the range boundary, then continuation in the original direction. Each stage is detected automatically - ATR-scaled rules confirm the trend leg, a colored box marks the consolidation, and only a poke beyond the range that closes back inside qualifies as a sweep - so the final signal arrives pre-filtered against the false breakouts that trap early entries.

## How to Trade the Rubber Band Liquidity Signals?

- **Range boxes**: a box appears when consolidation follows a strong move - bullish color after an uptrend, bearish after a downtrend - outlining the range under test.
- **Sweep lines**: when price pierces the range high or low but closes back inside, a line marks the grab that cleared out resting positions.
- **B label and yellow V**: after a confirmed sweep, a breakout in the direction of the prior trend prints a "B" and a yellow V shape - the compression is over and the rubber band has snapped back with the trend.

## Rubber Band Liquidity Signals Settings

- **Trend Lookback**: bars used to measure the strength of the preceding trend leg.
- **Trend Move ATR Multiplier**: minimum move size, relative to ATR, for the trend to qualify.
- **Consolidation Length**: bars required for a consolidation range to form.
- **Range Max ATR Multiplier**: caps how wide a valid range may be.
- **Max Range Duration**: expires stale boxes so old ranges stop producing signals.
- **Bullish Color / Bearish Color**: styling for ranges and sweep markers.

## Frequently Asked Questions

### How does this differ from the Liquidity Sweeps indicator?
[Liquidity Sweeps](https://www.luxalgo.com/library/indicator/liquidity-sweeps/) flags sweep events wherever they occur. This tool only signals when a sweep lands inside its full cycle - after a measured trend and a qualifying consolidation - so it produces fewer events, each carrying more context.

### Why must price close back inside the range?
That close is what separates a sweep from a genuine breakout. Holding beyond the range suggests acceptance of new prices; piercing it and closing back inside suggests the move existed to collect resting orders before the real move.

### Is Rubber Band Liquidity Signals free?
Yes - it is a free Library tool, and this page can load it straight into Quant, our coding agent, to test the signal logic on any market you like. You can also copy the source code from this page and run it anywhere Pine Script® runs.

## Related indicators

- [Liquidity Sweeps](https://www.luxalgo.com/library/indicator/liquidity-sweeps/) (Liquidity Sweep): markdown at https://www.luxalgo.com/library/indicator/liquidity-sweeps.md
- [FVG + Liquidity Sweep + CISD](https://www.luxalgo.com/library/indicator/fvg-liquidity-sweep-cisd/) (Liquidity Sweep): markdown at https://www.luxalgo.com/library/indicator/fvg-liquidity-sweep-cisd.md
- [Pure Price Action Liquidity Sweeps](https://www.luxalgo.com/library/indicator/pure-price-action-liquidity-sweeps/) (Liquidity Sweep): markdown at https://www.luxalgo.com/library/indicator/pure-price-action-liquidity-sweeps.md
- [Session Sweeps](https://www.luxalgo.com/library/indicator/session-sweeps/) (Liquidity Sweep): markdown at https://www.luxalgo.com/library/indicator/session-sweeps.md
- [Sweeps & IFVGs](https://www.luxalgo.com/library/indicator/sweeps-ifvgs/) (Liquidity Sweep): markdown at https://www.luxalgo.com/library/indicator/sweeps-ifvgs.md
- [ICT Concepts](https://www.luxalgo.com/library/indicator/ict-concepts/) (Liquidity Sweep): markdown at https://www.luxalgo.com/library/indicator/ict-concepts.md
- [Moving Averages Proximity Oscillator](https://www.luxalgo.com/library/indicator/moving-averages-proximity-oscillator/) (Disparity Index): markdown at https://www.luxalgo.com/library/indicator/moving-averages-proximity-oscillator.md
- [HTF Sweep Signals](https://www.luxalgo.com/library/indicator/htf-sweep-signals/) (Liquidity Sweep): markdown at https://www.luxalgo.com/library/indicator/htf-sweep-signals.md

---

Source: https://www.luxalgo.com/library/indicator/rubber-band-liquidity-signals/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/