Liquidity Swings & Sweeps

The Liquidity Swings & Sweeps indicator provides a visual representation of liquidity based on swing highs and lows, identifying and rating liquidity sweeps according to their time and price significance. This tool is designed to help traders identify potential reversal points, retracements, or price targets where buy/sell stops may be concentrated.

Usage

The script tracks swing points determined by user-defined sensitivity settings. When a new swing forms, the indicator scans previous swings to identify if liquidity has been "swept" (taken out).

• Liquidity Levels: Valid liquidity is shown as a horizontal line extending from a swing point. These lines remain active until the price breaks them or a new swing in the same direction is formed.
• Liquidity Sweeps: When a swing takes out a previous level, a dashed line connects the two points. If enabled, a label appears with a rating (❄️ to 💥) based on the duration the liquidity was held and the price depth of the sweep.
• Automatic Cleanup: The indicator automatically removes liquidity zones and lines that have been mitigated or superseded by more significant price action, ensuring the chart remains clean.

Details

The indicator distinguishes itself through a performance-optimized logic that only retains valid liquidity levels. It employs a look-back mechanism to find "Maximum Liquidity"—the absolute highest or lowest price point taken by a new swing—even if that point wasn't a primary swing itself. This provides a more accurate representation of mitigated price levels. The rating system offers a qualitative assessment of the sweep:

• Time-Based Strength: Longer-held liquidity levels are considered more significant when swept.
• Price-Based Secondary Filter: Sweeps covering a larger price distance (e.g., 10+ points) receive higher rankings.

Settings

• Swing Sensitivity (Left): Sets the number of bars to the left required to confirm a swing. This affects how liquidity is swept.
• Swing Sensitivity (Right): Sets the number of bars to the right required to confirm a swing. This measures the reaction to the sweep.
• Find Maximum Liquidity: When enabled, the tool seeks the absolute highest/lowest price point taken rather than just previous swings.
• Appearance Settings: Allows customization of High/Low liquidity line colors and line width.
• Show Liquidity Sweep Label/Rating: Toggles the visibility of the rating icons and tooltips.
• Alert on Liquidity Sweep: Users can toggle alerts for specific sweep strengths (Weak, Ok, Strong, Very Strong).

FAQ

How do I interpret the sweep ratings?

Ratings range from ❄️ (Weak) to 💥 (Very Strong). A 💥 rating indicates high-strength liquidity held for an hour or more was swept, while ❄️ represents liquidity held for less than 5 minutes.

What is the "Maximum Liquidity" setting?

This setting allows the script to look for the most extreme price level taken by the current swing, which might offer a better reference point for the sweep than a standard pivot point.

How can I access this tool?

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