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Rubber Band Liquidity Signals

By LuxAlgoJun 15, 2026

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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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