Liquidity Grab + RSI Divergence

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LIQUIDITY GRAB + RSI DIVERGENCE INDICATOR
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📌 OVERVIEW
This indicator identifies high-probability reversals by combining:
• Liquidity sweeps (stop hunts)
• RSI divergence confirmation
• Filters false breakouts automatically

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🟢 BUY SIGNAL (Green Triangle Up)

REQUIRES BOTH CONDITIONS:

1. Liquidity Grab Below Previous Low
• Price breaks BELOW recent low
• Candle CLOSES ABOVE that low
• Traps sellers who shorted the breakdown

2. Bullish RSI Divergence
• Price: Lower Low (LL)
• RSI: Higher Low (HL)
• Shows weakening downward momentum

➜ Result: Potential bullish reversal

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🔴 SELL SIGNAL (Red Triangle Down)

REQUIRES BOTH CONDITIONS:

1. Liquidity Grab Above Previous High
• Price breaks ABOVE recent high
• Candle CLOSES BELOW that high
• Traps buyers who bought the breakout

2. Bearish RSI Divergence
• Price: Higher High (HH)
• RSI: Lower High (LH)
• Shows weakening upward momentum

➜ Result: Potential bearish reversal

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📊 VISUAL INDICATORS

Main Signals:
🔺 Large Green Triangle = BUY (Liq Grab + Bullish Div)
🔻 Large Red Triangle = SELL (Liq Grab + Bearish Div)

Reference Levels:
━ Red Line = Previous High Level
━ Green Line = Previous Low Level

Additional Markers (Optional):
○ Small Green Circle = Liquidity grab low only
○ Small Red Circle = Liquidity grab high only
✕ Small Blue Cross = Bullish divergence only
✕ Small Orange Cross = Bearish divergence only

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⚙️ SETTINGS

1. Lookback Period (Default: 20)
• Range: 5-100
• Sets how far back to identify previous highs/lows
• Higher = fewer but stronger levels
• Lower = more frequent but weaker levels

2. RSI Length (Default: 14)
• Range: 5-50
• Standard RSI calculation period
• 14 is industry standard

3. RSI Divergence Lookback (Default: 5)
• Range: 3-20
• Controls pivot point sensitivity
• Higher = fewer divergence signals
• Lower = more divergence signals

4. Show Labels (Default: ON)
• Toggle BUY/SELL text labels
• Disable for cleaner chart view

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💡 HOW TO USE

Step 1: WAIT FOR CONFIRMATION
• Only trade LARGE TRIANGLE signals
• Ignore small circles/crosses alone

Step 2: CHECK TIMEFRAME
• Best on: 15min, 1H, 4H, Daily
• Avoid: 1min, 5min (too noisy)

Step 3: CONFIRM CONTEXT
• Check overall market trend
• Identify key support/resistance
• Look for confluence with price action

Step 4: ENTRY & RISK MANAGEMENT
• Enter on signal candle close or pullback
• Stop loss below/above the liquidity grab wick
• Target: Previous swing high/low or key levels
• Risk/Reward: Minimum 1:2 ratio

Step 5: SET ALERTS
• Create alert for "BUY Signal"
• Create alert for "SELL Signal"
• Never miss opportunities

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✅ BEST PRACTICES

DO:
✓ Use on multiple timeframes for confluence
✓ Combine with support/resistance zones
✓ Wait for both conditions (liq grab + divergence)
✓ Practice on demo account first
✓ Use proper position sizing

DON'T:
✗ Trade every small circle/cross
✗ Use on very low timeframes (<15min)
✗ Ignore overall market context
✗ Trade without stop loss
✗ Risk more than 1-2% per trade

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⚠️ IMPORTANT NOTES

• This is a CONFIRMATION tool, not a holy grail
• No indicator is 100% accurate
• Combine with your trading strategy
• Backtest on your preferred instruments
• Adjust parameters for your trading style
• Higher timeframes = more reliable signals
• Always use risk management

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🔔 ALERTS INCLUDED

Two alert conditions are built-in:
1. "BUY Signal" - Liquidity Grab + Bullish RSI Divergence
2. "SELL Signal" - Liquidity Grab + Bearish RSI Divergence

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📈 RECOMMENDED SETTINGS BY TIMEFRAME

5-15 Min Charts:
• Lookback: 10-15
• RSI Length: 14
• RSI Div Lookback: 3-5

1H-4H Charts:
• Lookback: 20-30
• RSI Length: 14
• RSI Div Lookback: 5-7

Daily Charts:
• Lookback: 30-50
• RSI Length: 14
• RSI Div Lookback: 7-10

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Good luck and trade safe! 🚀