[TehThomas- Pro] - Liquidity Signals

2월 27일

Overview
This Pine Script indicator is designed to generate Buy and Sell signals based on liquidity sweeps and market structure shifts (MSS) or break of structure (BOS). The combination of liquidity sweeps and market structure changes provides a highly confluential signal that can be used to identify high-probability trade setups. This indicator is capable of working as a standalone tool or as part of a broader trading strategy.

Core Concepts

Liquidity Sweeps:
A liquidity sweep occurs when the price temporarily breaks a previous high or low, taking out stop losses or inducing breakout traders, only to reverse direction shortly after.

The indicator detects these liquidity sweeps at pivot points defined by a user-set pivotPeriod.

It plots Buyside Liquidity (resistance) or Sellside Liquidity (support) lines on the chart to indicate where liquidity pools are likely positioned.

Market Structure Shifts (MSS) and Break of Structure (BOS):
BOS: This occurs when the price closes above or below a previous swing high or low, indicating a potential shift in trend.

MSS: This is a more aggressive form of market structure change where the price action reverses after a liquidity sweep, signaling a potential reversal before a BOS confirmation.

The script tracks swing highs and swing lows using the pivot_strength setting to define how many bars are required on both sides of a pivot point.

Confluence of Signals:
The main signal is plotted when a Liquidity Sweep is followed by an MSS within a specified number of bars (25 by default).

This creates a high-probability trade signal because it combines both liquidity traps and market structure reversals.

Below, you can see the signals the indicator generates
There is one loss marked by the second circle.


Settings and Inputs

Liquidity Sweep Settings

• pivotPeriod: Defines the left and right length of the pivot points to detect swing highs and lows.
  
• maxLine: Maximum number of liquidity lines plotted on the chart.
  
• resistanceColor & supportColor: Colors for Buyside and Sellside liquidity lines.
  
• lineExtend: Number of bars to extend liquidity lines into the future.
  
• hitAction: Determines what happens when liquidity lines are hit (dotted, dashed, or delete).
  

Market Structure Settings

• show_mss: Toggle to display MSS signals on the chart.
  
• show_bos: Toggle to display BOS signals on the chart.
  
• Customizable line styles, colors, and labels for both MSS and BOS.
  

How to Use the Indicator

Signal Confirmation:
A Buy Signal is most effective when combined with a liquidity sweep of sellside liquidity followed by a bullish market structure shift.

A Sell Signal is most effective when combined with a liquidity sweep of buyside liquidity followed by a bearish market structure shift.

Always check confluence with other indicators such as moving averages or volume analysis.

Trade Management:
Place stop-loss orders below the liquidity sweep low for buys or above the liquidity sweep high for sells.

Use the previous swing high or low as a target or set custom risk-reward ratios.

Why This Indicator Works So Well

• ✅ Combines liquidity sweeps and market structure for highly accurate signals.
  
• ✅ Works across all timeframes and markets.
  
• ✅ Automatically plots support and resistance zones.
  
• ✅ Provides clear buy and sell signals with customizable alerts.
  
• ✅ Helps traders avoid false breakouts by waiting for market structure confirmation.
  

Conclusion
This indicator is a highly confluential trading tool that combines liquidity sweeps with market structure shifts to generate Buy and Sell signals. It provides a strong edge by confirming liquidity traps with market structure reversals. With customizable settings, it can be adapted to different timeframes and trading styles, making it suitable for both scalping and swing trading strategies.

By automating the detection of these advanced concepts, the indicator helps traders stay objective and disciplined in their decision-making process.

Whether you're a beginner or an advanced trader, this indicator will help you spot high-probability trade setups and improve your overall trading performance.

Disclaimer
This indicator is a powerful tool for identifying potential trading opportunities, but it is not a guarantee of future performance. Use this indicator at your own risk. Trading involves significant risk, and it is essential to have proper knowledge and experience before making any financial decisions. The signals provided by this indicator should be used as part of a comprehensive trading plan and combined with other forms of analysis. The creator is not responsible for any financial losses incurred while using this tool.

3월 14일

릴리즈 노트

Changed the alert settings.
You can now add buy and sell alerts