Liquidity Heatmap & Volume-Weighted RSI

Liquidity Heatmap Indicator with Volume-Weighted RSI

Description:

The Liquidity Heatmap Indicator with Volume-Weighted RSI (VW-RSI) is a powerful tool designed for traders to visualize market liquidity zones while integrating a volume-adjusted momentum oscillator. This indicator provides a dynamic heatmap of liquidity levels across various price points and enhances traditional RSI by incorporating volume weight, making it more responsive to market activity.

Key Features:

Liquidity Heatmap Visualization: Identifies high-liquidity price zones, allowing traders to spot potential areas of support, resistance, and accumulation.

Volume-Weighted RSI (VW-RSI): Enhances the RSI by factoring in trading volume, reducing false signals and improving trend confirmation.

Customizable Sensitivity: Users can adjust parameters to fine-tune heatmap intensity and RSI smoothing.

Dynamic Market Insights: Helps identify potential price reversals and trend strength by combining liquidity depth with momentum analysis.


How to Use:

1. Identify Liquidity Zones: The heatmap colors indicate areas of high and low liquidity, helping traders pinpoint key price action areas.


2. Use VW-RSI for Confirmation: When VW-RSI diverges from price near a liquidity cluster, it signals a potential reversal or continuation.


3. Adjust Parameters: Fine-tune the RSI period, volume weighting, and heatmap sensitivity to align with different trading strategies.



This indicator is ideal for traders who rely on order flow analysis, volume-based momentum strategies, and liquidity-driven trading techniques.