Liquidity Sweep Guardian (Universal % or point based)

Liquidity Sweep Guardian - Complete User Guide

## Overview

The **Liquidity Sweep Guardian** is a visual warning system designed to prevent premature counter-trend trades (fades) near Previous Day High (PDH) and Previous Day Low (PDL) levels. This indicator helps you avoid one of the most common trading mistakes: fading too early before liquidity sweeps complete.

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## 🎯 Core Trading Principle

### **THE GOLDEN RULE: Don't Fade Until It's Unlocked**

Price often **accelerates into key levels** to sweep liquidity before reversing. Trading against this momentum is extremely dangerous.

**The Process:**
1. **Danger Zone** (Red/White Box) = ⚠️ **DO NOT FADE** - Sweep likely incoming
2. **Sweep Occurs** (Triangle marker appears) = Price penetrates the level
3. **Reclaim Happens** (Price returns above/below level) = Level is tested
4. **🔓 UNLOCKED** (Gold border, green label) = **NOW you may CONSIDER a fade**

> **Important:** "UNLOCKED" means you may now *consider* a fade setup. It is NOT a trade signal itself. You still need your entry confirmation, risk management, and trade plan.

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## 📊 Visual Elements Explained

### 1. **Danger Zone Boxes (Red Border by Default)**

**Two types of zones around PDH/PDL:**

- **Outer Danger Zone** (White fill): ±75pts (or 0.30%) around the level
- Indicates proximity to a key level where sweeps commonly occur
- Yellow/cautious trading zone

- **Inner Critical Zone** (Black fill): ±25pts (or 0.10%) around the level
- Highest probability area for liquidity sweep traps
- Avoid fading here at all costs

**What to do:**
- When price enters these zones, **wait and watch**
- Do not initiate counter-trend positions
- Allow the sweep to play out

### 2. **Unlocked Zones (Gold Border #ffeb3b)**

When a zone turns **gold/yellow** with green fill:
- The level has been swept AND reclaimed
- The liquidity grab is complete
- You may now look for fade opportunities with proper confirmation

### 3. **PDH/PDL Lines**

- **PDH Line** (Red): Previous Day High with price label
- **PDL Line** (Green): Previous Day Low with price label
- These are your key reference levels for the session

### 4. **Sweep Labels**

**Triangle Markers (SWEEP):**
- **Green Triangle** = Clean sweep (10-25pts penetration)
- **Orange Triangle** = Extended sweep (25-50pts penetration)
- **Red Triangle** = Deep penetration (50+ pts) - likely continuation, not reversal

**Warning Labels:**
- **⚠️ DEEP CONTINUATION?** = Penetration too deep, probably NOT a reversal setup

**Unlock Labels:**
- **🔓 LONG UNLOCKED** = PDL swept and reclaimed, may consider long fades
- **🔓 SHORT UNLOCKED** = PDH swept and reclaimed, may consider short fades

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## ⚙️ Settings Guide

### **Calculation Mode**

**Use Percentage Mode (Default: ON)**
- ✅ **Enabled**: Universal mode - works on NQ, ES, RTY, stocks, crypto, forex
- ❌ **Disabled**: Fixed points mode - for specific instruments only

**When to use each:**
- **Percentage Mode**: Trading multiple instruments, or instruments with varying price levels
- **Fixed Points Mode**: Single instrument focus (e.g., only trading NQ at current levels)

### **Danger Zone Settings**

**Percentage Mode (Default for Universal Use):**
- **Danger Zone**: 0.30% each side (≈75pts on NQ25,000)
- **Critical Zone**: 0.10% each side (≈25pts on NQ25,000)

**Fixed Points Mode (For NQ Specifically):**
- **Danger Zone**: 75 points each side
- **Critical Zone**: 25 points each side

**Adjustment Tips:**
- For more volatile instruments: Increase percentages/points
- For less volatile instruments: Decrease percentages/points
- For higher timeframes: Use wider zones
- For lower timeframes: Use tighter zones

### **Sweep Classification**

**What defines a "real" sweep:**
- **Minimum**: 10pts / 0.04% - Shallow penetration may not grab enough liquidity
- **Optimal**: 10-25pts / 0.04-0.10% - "Goldilocks zone" for reversal setups
- **Extended**: 25-50pts / 0.10-0.20% - Deeper sweep, less reliable
- **Continuation**: 50+pts / 0.20%+ - Too deep, likely NOT reversing

**Max Bars for Reclaim**: 5 bars (default)
- Price should reclaim the level relatively quickly
- If it takes too long, the sweep may have failed

### **Visual Customization**

**Box Settings:**
- **Left Extension**: 60 bars (how far back the box extends)
- **Right Extension**: 50 bars (how far forward the box extends)

**Toggle Options:**
- Show/Hide Danger Zone Boxes
- Show/Hide PDH/PDL Lines
- Show/Hide Price Labels on lines
- Show/Hide Sweep Labels
- Show/Hide Unlock Labels

### **Color Customization**

All colors are fully customizable:
- Danger Zone Fill & Border
- Critical Zone Fill & Border
- Unlocked Zone Fill & Border
- PDH/PDL Line Colors
- PDH/PDL Label Colors
- Border Widths (1-5 pixels)
- Line Widths (1-5 pixels)

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## 🎓 Trading Strategy Examples

### **Example 1: Long Setup at PDL**

1. **Morning**: Price approaches PDL (danger zone appears)
2. **Don't Fade Yet**: Price enters critical zone - resist urge to buy
3. **Sweep**: Price drops 15pts below PDL (green triangle appears)
4. **Reclaim**: Price closes back above PDL within 3 bars
5. **🔓 UNLOCKED**: Gold border + "LONG UNLOCKED" label appears
6. **Trade Setup**: Now look for bullish confirmation (order flow, structure, etc.)

### **Example 2: Avoiding a Trap at PDH**

1. **Afternoon**: Price rallies into PDH danger zone
2. **Temptation**: You want to short here (it "looks toppy")
3. **Sweep**: Price breaks 50pts above PDH (red triangle + ⚠️ warning)
4. **Continuation**: Deep penetration suggests continuation, not reversal
5. **Result**: No unlock occurs, price keeps running higher - trap avoided!

### **Example 3: Failed Unlock (No Trade)**

1. Price sweeps PDL by 12pts (green triangle)
2. Price struggles to reclaim PDL, stays below for 10+ bars
3. No "UNLOCKED" label appears
4. **Correct Action**: Do not fade - sweep failed to reclaim

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## 📱 Alerts

The indicator includes built-in alerts for:

- **Entering Danger Zones**: Get warned when price approaches PDH/PDL
- **Sweep Detection**: Know immediately when a level is swept
- **Unlock Signals**: Get notified when fade setups become available
- **Continuation Warnings**: Alert when penetration suggests continuation

**To Set Alerts:**
1. Right-click indicator → "Add Alert"
2. Select desired alert condition
3. Configure notification preferences

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## ⚠️ Important Disclaimers

### **What This Indicator IS:**
✅ A visual warning system to prevent premature fades
✅ A tool to identify when liquidity sweeps have completed
✅ A framework for counter-trend trade timing

### **What This Indicator IS NOT:**
❌ A complete trading system
❌ An entry signal generator
❌ A guarantee of trade success
❌ A substitute for proper risk management

### **Always Remember:**
- "UNLOCKED" = You may CONSIDER a fade (not a signal to trade)
- You still need your own entry confirmation
- You still need proper stop placement
- You still need position sizing and risk management
- Not every unlock leads to a successful trade
- Market context and order flow still matter

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## 🔧 Recommended Settings by Instrument

### **NQ (Nasdaq-100 E-mini Futures)**
- Mode: Percentage or Fixed Points
- Percentage: 0.30% / 0.10% (default)
- Fixed Points: 75pts / 25pts (default)

### **ES (S&P 500 E-mini Futures)**
- Mode: Percentage
- Danger: 0.25% / Critical: 0.08%
- Or Fixed Points: 15pts / 5pts

### **RTY (Russell 2000 E-mini Futures)**
- Mode: Percentage
- Danger: 0.35% / Critical: 0.12%
- Or Fixed Points: 8pts / 3pts

### **Stocks (High Volume Large Caps)**
- Mode: Percentage (recommended)
- Danger: 0.20-0.40% / Critical: 0.08-0.15%
- Adjust based on ATR and volatility

### **Crypto (BTC, ETH)**
- Mode: Percentage (essential)
- Danger: 0.40-0.60% / Critical: 0.15-0.20%
- Higher volatility requires wider zones

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## 💡 Pro Tips

1. **Use on Higher Timeframes**: Works best on 5min, 15min, 1hr charts
2. **Combine with Order Flow**: Use with footprint/delta for confirmation
3. **Watch Volume**: Strong volume on sweep = better reversal potential
4. **Consider Time of Day**: Sweeps during RTH often more reliable
5. **Multiple Timeframes**: Check if higher TF also shows unlock
6. **Don't Force Trades**: Not every session produces clean setups
7. **Journal Results**: Track which unlock types work best for you
8. **Respect Continuation Signals**: When indicator says "too deep," listen

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## 🆘 Troubleshooting

**Q: Box isn't showing up**
A: Check that "Show Danger Zone Boxes" is enabled in Visual Settings

**Q: No price on labels**
A: Enable "Show Price Labels on Lines" in Visual Settings

**Q: Zones seem too tight/wide**
A: Adjust Danger Zone % or points based on current volatility

**Q: Getting too many/too few unlocks**
A: Adjust sweep classification thresholds (min/max penetration)

**Q: Want thicker/thinner lines**
A: Adjust line widths in "PDH/PDL Line Colors" section

**Q: Colors not matching my chart theme**
A: Fully customize all colors in the color settings groups

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## 📚 Additional Resources

- Study price action around PDH/PDL on your instruments
- Learn about liquidity sweeps and stop hunts
- Understand market structure and order flow
- Practice identifying setups on replay/historical data
- Keep a trading journal of unlock scenarios



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*Remember: The best trade is often the one you don't take. This indicator helps you avoid the trades you shouldn't take, so you can focus on the ones you should.*