This indicator shows inducement / stop hunts accompanied by volume spikes. The idea is inspired by ICT (Inner Circle Trader) concepts where price is always seeking "liquidity" by reaching for trivial pivots where the average retail trader would put their stop loss. When price seeks these levels and stops out these traders, you might expect an influx of volume due to the high number of shares/contracts being exchanged. And when there is an above-average spike in volume at these prices, it's possible to assume "smart money" may be buying retail's sell stops and vice versa. This is just my interpretation - I'm aware that ICT doesn't use volume as part of his analysis, and often advocates against using volume altogether, however I personally find it to be a great analytical tool in this context.
In my opinion this works best on 1m and smaller timeframes. Volume gets very diluted on timeframes greater than 1-3 minutes. It's easier to find volume spikes on very small timeframes like the 15s.
Notas de prensa
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Added options to change the raid line color and style, per request
Hey, thanks for the indicator. Does this work for the forex market?
SPY-Hunter
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So I did a good amount of manual backtesting on this indicator over the past couple of days mostly using the default settings with NQ on the 15s chart taking entries only during ICT killzones (just tweaked the volume from 100 down to 21 for more sensitivity). It definitely seems to have a positive expectancy (around 0.3-0.4R) if you pair it with taking a Strat type reversal entry (buy sell/setup) within 3x candles of the signal targeting the nearest short term and/or intermediate pivot. The problem is you tend to have very long losing streaks and then a huge winner or two so such strategy wouldn't be for everyone having significant P/L drawdown (maybe best handled by automation). I found taking shorter targets/using trailing stops can smooth out the P/L and actually increase expectancy by around 0.1R per trade. If there was a way to somehow screen out entry signals in a PMG situation (wrong side of the curve in a MMXM) I think that would greatly reduce those long losing streaks. Finally something you might look into Nephew_Sam has an open source "Liquidity Heatmap" indicator that might be a good way to focus only on liquidity/stop raids at objectively more significant pivots. Anyway probably too much unsolicited feedback, but if you have any questions or whatever hit me up on the Stat discord. Keep up the good work!
tradeforopp
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@SPY-Hunter, thanks for the feedback man! I've found similar results. I'd like to eventually include some component of market structure to make this more reliable. Trend days can be especially bad for these signals because, when you're constantly making new lows/highs, there's a good chance you're going to catch decent volume on each new one. That's where I personally see a lot of the losing streaks. I'll definitely look into Sam's heatmap script, again I appreciate all the info!
igorSMConcept
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Dude, could u put some option to remove the oldest raids? It would be good to get the charts clean... I think one filter to "max raids" count gonna be good
LeeNghia-jiiloo
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Hi sir, can i use this indicator ? thank you
abdjo
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Hi
could you add an inducement area as a channel on this indicator? and to explain when we enter the deal regarding the indicator signals. above the channel or low the channel?
decentMeerkat007
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could you kindly explain with a labelled diagram maybe? e.g. what re the dashed lines grean and red? etc and how to use them? also the arrows . Thanks