Liquidity Concepts
Last updated
Last updated
Liquidity Concepts identify key zones where price grabs or flows toward liquidity.
This Liquidity Grab Indicator highlights areas where price briefly moves in one direction to "grab" liquidity before reversing. When a liquidity grab occurs through a large candle’s wick:
An upward liquidity grab occurs when the price forms a large upper wick, signaling the market's attempt to break higher but quickly retracting before continuing to rise. This pattern usually indicates a situation where short traders are liquidated as the price breaks above the previous high, forcing a continuation of the bullish trend.
The liquidity above this high is grabbed as the price breaks that level and moves upward. The chart marks this pattern with a triangle below the wick to highlight the bullish trend continuation as it signals the absorption of short positions.
A downward liquidity grab happens when the price forms a large lower wick, briefly moving lower before reversing and continuing the downtrend. This pattern represents the liquidity absorption where long traders are forced out of their positions, confirming the continuation of a bearish trend.
The market takes the liquidity below the previous low before moving lower, indicating that the bearish momentum remains intact.
Large wicks, especially those at reversal points, can indicate areas of high liquidity where significant buy or sell pressure is present. These wicks often suggest that a large number of market orders were filled at these levels, and the price may either reverse from these points (in the case of a failed liquidity grab).
These liquidity grabs provide key insights into market behavior, as they show where the market failed to continue in one direction before reversing or where it successfully absorbed the liquidity to push further in the direction of the trend.
This feature highlights significant swing moves with high liquidity, emphasizing the midline of these ranges as potential significant levels where price could react in the future.
Possible Pump: After a downtrend, a green box signals a potential pump. The market may react positively around the midline of this range, indicating the possibility of upward price movement as liquidity shifts from the previous downtrend.
Possible Dump: A red box appears after an uptrend or during periods of red liquidity flow, indicating the potential for a dump. The price is likely to react at the midline of this range, potentially moving downward as liquidity shifts out of the previous uptrend.
These high liquidity swing areas offer critical levels to watch for future price reactions, with the midline acting as a key support/resistance level.
These levels can guide traders in identifying likely points where price may consolidate, reverse, or continue its trend.
The Buyside & Sellside feature introduces a clear visualization of recent support and resistance levels on the chart, accompanied by a percentage indicator showing the strength of each side.
Buyside Levels: Represent areas of strong buyer interest (support zones), highlighted in green, showing where price may find a floor.
Sellside Levels: Highlight areas of significant seller pressure (resistance zones), shown in red, indicating potential price ceilings.
Each zone includes a percentage metric to quantify the relative strength of buyers or sellers in that region, aiding decision-making.
This feature enhances the ability to anticipate price reactions at key levels, making it an essential tool for technical analysis and trade planning.
Liquidity Grab:
Enabled: When checked, the Liquidity Grab feature is active and will display liquidity grab signals on the chart.
Sensitivity (Number): Adjusts the sensitivity of the liquidity grab detection. A lower value increases sensitivity, showing more liquidity grabs, while a higher value reduces sensitivity, displaying only the most significant grabs.
Colors: Customizable color options for liquidity grabs in both upward and downward directions, allowing easy visual distinction between buy-side and sell-side liquidity grabs.
Liquidity Flow:
Enabled: When checked, the Liquidity Flow feature is activated, showing areas where liquidity flow trends are present.
Sensitivity (Number): Controls the sensitivity of the liquidity flow detection. Lower values increase sensitivity, capturing more flow points, while higher values display only the strongest liquidity flows.
Colors: Allows customization of colors for liquidity flow, with different colors for upward and downward flow, making it easier to see directional liquidity trends on the chart.
Buyside & Sellside:
Enabled: Displays recent support (Buyside) and resistance (Sellside) levels on the chart, along with their strength percentages.
Point Selection:
Extreme Points: Focuses on the most significant support and resistance levels.
Adjusted Points: Provides a refined view by smoothing and adjusting key levels for precision.
Visualization Style:
Line: Displays levels as single horizontal lines for minimal visual impact.
Area: Highlights support and resistance zones for a more comprehensive view.
Colors: Customize the colors for Buyside (support) and Sellside (resistance) zones to match your charting preferences.
These settings provide flexibility in detecting and visually differentiating liquidity concepts on the chart, helping traders identify potential reversals and key liquidity zones based on their preferred sensitivity and color preferences.
