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:
Downward Liquidity Grab: If price quickly drops and leaves a long wick below, a downward-facing triangle appears, indicating that sell-side liquidity was taken before a reversal upward.
Upward Liquidity Grab: If price spikes upward and leaves a long wick above, an upward-facing triangle is shown, signaling that buy-side liquidity was grabbed before a potential reversal downward.
These triangles help identify areas where institutional traders may have targeted liquidity, often leading to price reversals or significant moves in the opposite direction.
Short Liquidation: Each liquidity grab acts to "liquidate" or stop out short positions, allowing for renewed buying pressure that pushes the trend higher.
Long Liquidation: Each downward liquidity grab effectively "liquidates" or stops out long positions, adding selling pressure that fuels the downtrend.
This feature helps traders identify areas where the price may briefly exceed a level to collect liquidity before reversing or fuelling trend, offering potential entry points in alignment with the broader market structure trend.
refers to the movement of liquidity within the market, typically cycling between accumulation and distribution phases. These phases reflect where larger players or institutions are either gathering positions (accumulation) or unloading them (distribution), impacting the overall trend direction.
Accumulation: These zones represent periods where large players or institutions are accumulating assets. During accumulation, price tends to consolidate or move within a relatively tight range, as buyers slowly build positions without pushing the price up too quickly. The market often experiences less volatility in these areas, with downward moves being limited by strong buying interest. Once accumulation is complete, a breakout to the upside may signal the start of an uptrend, as accumulated positions drive higher prices.
Distribution: Distribution phases occur when these larger players begin to offload their positions, usually after a sustained uptrend. During this phase, sellers gradually push prices lower or keep them within a confined range. Price can often move sideways or with a slight downward bias as selling pressure increases. Eventually, if distribution is strong enough, it may lead to a downtrend as the selling overwhelms any remaining buying interest.
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.
Strength Percentage: 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.
