# Stop Placement vs Liquidity Pools Stop Placement vs Liquidity Pools is an indicator on [Vela](https://vela.luxalgo.com/chart), our next-generation charting platform, written in Pine Script®. Stop Placement vs Liquidity Pools maps stop pockets beyond confirmed swings as ATR-scaled zones, marks prior day and week extremes and round numbers as levels, labels every swing-pool pierce as a Sweep or Break, and projects safer stop guides 0.5 ATR beyond the nearest level, never inside its pocket. An optional audit checks an intended stop price against every mapped pocket. - Indicator in the LuxAlgo Library, by LuxAlgo, published Mar 14, 2026. - Access: free. - Concepts: [Stop Placement vs Liquidity Pools](https://www.luxalgo.com/library/concept/stop-placement-vs-liquidity-pools/) (primary) - Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=urzmq181jjniao4w770zogno - Page: https://www.luxalgo.com/library/indicator/stop-placement-vs-liquidity-pools/ **Stop Placement vs Liquidity Pools** turns [stop placement vs liquidity pools](https://www.luxalgo.com/library/concept/stop-placement-vs-liquidity-pools/) into a mapped, auditable overlay. Confirmed swings, prior day and week extremes and nearby round numbers become ATR-scaled stop pockets (buyside above highs, sellside below lows), and equal extremes merge into thicker pools. Dashed guides mark the closest safer stop beyond the nearest pockets; a dashboard sums up pools, guides, buffer and audit verdict. ## How to Trade the Stop Placement vs Liquidity Pools? - **Sweep label**: price pierces a pool but closes back inside: a stop-driven run, often a short-term extreme. - **Break label**: the close holds beyond the level: acceptance rather than a stop run. - **Safer stop guides**: park short stops beyond the buyside guide, long stops beyond the sellside guide, resizing for the wider distance. - **Stop audit**: set a price and a stop inside any mapped pocket is relocated beyond the pool plus buffer. Approach alerts fire within the configured ATR distance of the nearest pocket; pools register on closed bars only and never repaint. ## Stop Placement vs Liquidity Pools Settings - **Swing Length** (default 10): bars each side to confirm a swing. - **Pocket Depth** (default 0.25): pocket span beyond each level, in ATR. - **Equal Level Tolerance** (default 0.25): ATR distance within which swings merge as equal. - **Active Pools per Side** (default 5) and **ATR Length** (default 14). - **Prior Day High/Low** and **Prior Week High/Low** (default enabled); **Round Numbers** (default enabled) with **Step** (default 0 = automatic grid). - **Stop Buffer** (default 0.5) and **Safer Stop Guides** (default enabled). - **Audit Intended Stop** (default disabled) with a **Price** field. - **Sweep / Break Labels** (default enabled) and **Approach Distance** (default 1.0). - Style options cover colors, dashboard corner and text size. ## Frequently Asked Questions ### What separates a Sweep from a Break? Both begin with a push beyond a mapped pool. A Sweep closes back inside, the signature of stops being run; a Break closes and holds beyond, initiative trade. They argue for opposite follow-through. ### How does this compare with ATR-based Stop Distance? [ATR-based Stop Distance](https://www.luxalgo.com/library/indicator/atr-based-stop-distance/) sizes a stop from volatility alone, blind to structure. This tool starts from the levels where stops bunch, using ATR only to scale depth and buffer. The two compose: take whichever placement is wider. ### Are the pools actual resting orders? No. Most venues never display resting stops, so every pocket is inferred from structure: obvious levels attract stops, with no guarantee any rest there. Treat the map as placement discipline, not an order-book readout. ## Related indicators - [Elder SafeZone Stop](https://www.luxalgo.com/library/indicator/elder-safezone-stop/) (Risk & Exits): markdown at https://www.luxalgo.com/library/indicator/elder-safezone-stop.md - [Market Structure Trailing Stop](https://www.luxalgo.com/library/indicator/market-structure-trailing-stop/) (Structure Stop): markdown at https://www.luxalgo.com/library/indicator/market-structure-trailing-stop.md - [Risk Management Tool](https://www.luxalgo.com/library/indicator/risk-management-tool/) (Fixed Stops): markdown at https://www.luxalgo.com/library/indicator/risk-management-tool.md - [Statistical Trailing Stop](https://www.luxalgo.com/library/indicator/statistical-trailing-stop/) (Volatility Stop): markdown at https://www.luxalgo.com/library/indicator/statistical-trailing-stop.md - [Signals & Overlays](https://www.luxalgo.com/library/indicator/luxalgo-signals-overlays/) (Risk & Exits): markdown at https://www.luxalgo.com/library/indicator/luxalgo-signals-overlays.md - [Universal Signal Backtester](https://www.luxalgo.com/library/indicator/universal-signal-backtester/) (Risk & Exits): markdown at https://www.luxalgo.com/library/indicator/universal-signal-backtester.md - [Session Sweep & iFVG RR](https://www.luxalgo.com/library/indicator/session-sweep-ifvg-rr/) (Risk & Exits): markdown at https://www.luxalgo.com/library/indicator/session-sweep-ifvg-rr.md - [Market Structure & Fibonacci Zones + RR](https://www.luxalgo.com/library/indicator/market-structure-fibonacci-zones-rr/) (Risk & Exits): markdown at https://www.luxalgo.com/library/indicator/market-structure-fibonacci-zones-rr.md --- Source: https://www.luxalgo.com/library/indicator/stop-placement-vs-liquidity-pools/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/