Rubber Band Liquidity Signals
By LuxAlgoJun 15, 2026
Rubber Band Liquidity Signals trades one specific sequence: a strong trend, a tight consolidation, a 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
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