Pure Price Action Liquidity Sweeps [LuxAlgo]

8 ago

The Pure Price Action Liquidity Sweeps indicator is a pure price action adaptation of our previously published and highly popular Liquidity-Sweeps script.

Similar to its earlier version, this indicator detects the presence of liquidity sweeps on the user's chart, while also identifying potential areas of support/resistance or entry when liquidity levels are taken. The key difference, however, is that this price action version relies solely on price patterns, eliminating the need for numerical swing length settings.

🔶 USAGE



A Liquidity Sweep occurs when the price breaks through a liquidity level, after which the price returns below/above the liquidity level, forming a wick.



The examples below show a bullish and bearish scenario of "a wick passing through a liquidity level where the price quickly comes back".



Short-term liquidity sweep detection is based on short-term swing levels. Some of these short-term levels, depending on further market developments, may evolve into intermediate-term levels and, in the long run, become long-term levels. Therefore, enabling short-term detection with the script means showing all levels, including minor and temporal ones. Depending on the trader's style, some of these levels may be considered noise. Enabling intermediate and long-term levels can help filter out this noise and provide more significant levels for trading decisions. For further details on how swing levels are identified please refer to the details section.



The Intermediate-term option selection for the same chart as above, filters out minor or noisy levels, providing clearer and more significant levels for traders to observe.



🔶 DETAILS

The swing points detection feature relies exclusively on price action, eliminating the need for numerical user-defined settings.

The first step involves detecting short-term swing points, where a short-term swing high (STH) is identified as a price peak surrounded by lower highs on both sides. Similarly, a short-term swing low is recognized as a price trough surrounded by higher lows on both sides.

Intermediate-term swing and long-term swing points are detected using the same approach but with a slight modification. Instead of directly analyzing price candles, we now utilize the previously detected short-term swing points. For intermediate-term swing points, we rely on short-term swing points, while for long-term swing points, we use the intermediate-term ones.



🔶 SETTINGS

• Detection: Period options of the detected swing points.
  

🔶 RELATED SCRIPTS

• Pure-Price-Action-Structures.
• Liquidity-Sweeps.