Liquidity Analysis
Liquidity Bubbles
Overview
The Liquidity Bubbles feature is designed to identify key moments of high volume and significant order flow, which often signal important price levels. The indicator detects two types of bubbles:
Regular Liquidity Bubbles: These appear when there is a strong agreement between price direction, volume, and order flow (delta). A bullish bubble suggests strong buying pressure at a key low, while a bearish bubble indicates strong selling pressure at a key high.
Trapped Liquidity Bubbles: These are more advanced signals that identify areas where traders may have been "trapped" on the wrong side of the market. A bullish trap bubble appears when price closes high after significant selling pressure near the lows, suggesting sellers are trapped. A bearish trap bubble appears when price closes low after strong buying pressure near the highs, suggesting buyers are trapped.
These bubbles are plotted directly on the chart, providing a clear visual cue of potential support, resistance, or reversal zones.
Settings
You can customize the detection sensitivity for both regular and trapped liquidity bubbles to fit your analysis style.
Regular Liquidity Bubbles
Regular Liquidity Bubbles
Enables or disables the detection of standard liquidity bubbles.
Sensitivity
Controls how sensitive the algorithm is for detecting regular bubbles. A lower number is less sensitive and requires stronger signals, while a higher number will detect weaker signals more frequently.
Bullish/Bearish Color
Sets the colors for the bullish and bearish regular liquidity bubbles.
Adaptive Transparency
When enabled, the transparency of the bubbles will dynamically adjust based on their significance. More significant bubbles will appear more solid.
Trapped Liquidity Bubbles
Trapped Liquidity Bubbles
Enables or disables the detection of trapped liquidity bubbles.
Sensitivity
Controls the detection sensitivity for trapped liquidity bubbles. A lower number requires stronger trapping signals, while a higher number is more sensitive.
Bullish/Bearish Color
Sets the colors for the bullish and bearish trapped liquidity bubbles.
Adaptive Transparency
When enabled, the transparency of the trapped bubbles will dynamically adjust based on their significance.
Best Practices & Usage
Use Bubbles as Confirmation: Liquidity bubbles are powerful confirmation signals. A regular buy signal that appears at the same time as a bullish liquidity bubble is a much higher-confidence setup.
Identify Key Zones: Areas with a cluster of bubbles often represent significant support or resistance zones where large volumes have been traded.
Watch for Trapped Traders: Trap bubbles can be excellent indicators of a potential reversal, as they signal that one side of the market has been overpowered. For example, a bearish trap bubble at a key high suggests that buyers have been exhausted and sellers are taking control.
Liquidity Grabs
Overview
The Liquidity Grabs feature automatically detects and visualizes instances where the price makes a sharp move to "grab" liquidity resting above or below recent swing highs or lows. This often happens when institutional traders push the price to trigger stop-loss orders before reversing in the intended direction.
The indicator highlights these events with a candle overlay and a wick zone, showing you exactly where the liquidity grab occurred.
Settings
You can enable or disable the Liquidity Grabs feature and adjust its sensitivity to filter for the most significant events.
Liquidity Grabs
Enables or disables the detection of liquidity grabs.
Sensitivity
Controls how sensitive the algorithm is for detecting liquidity grabs. A lower number is less sensitive and will only show the most significant grabs, while a higher number will detect smaller ones.
Bullish/Bearish Color
Sets the colors for bullish and bearish liquidity grab candles.
Adaptive Transparency
When enabled, the transparency of the grab candle will adjust based on its significance.
Best Practices & Usage
Spot Fakeouts: Liquidity grabs are often fakeouts. For example, a bullish liquidity grab happens when the price briefly drops below a key low (grabbing sell-side liquidity) before quickly reversing to the upside. This can be a powerful entry signal for long trades.
Confirm with Other Tools: A liquidity grab that occurs at a key support/resistance level or supply/demand zone is a much stronger signal.
Adjust Sensitivity to Reduce Noise: In choppy markets, it's best to use a lower sensitivity setting to filter out minor grabs and focus only on the most significant ones.
Liquidity Waves
Overview
The Liquidity Waves feature provides a unique way to visualize buying and selling pressure through volume spread analysis (VSA). It plots colored waves directly on your chart to indicate when there is a significant imbalance between buying and selling activity, suggesting a potential continuation or reversal.
Bullish Waves (Blue): Appear below the price and signal strong buying pressure or demand.
Bearish Waves (Purple): Appear above the price and signal strong selling pressure or supply.
Settings
You can customize the sensitivity of the Liquidity Waves to match your trading style and market conditions.
Liquidity Waves
Enables or disables the Liquidity Waves visualization.
Sensitivity
Controls the sensitivity of the wave detection algorithm. A lower value is less sensitive and requires stronger signals, while a higher value will detect weaker signals more frequently.
Bullish/Bearish Color
Sets the colors for the bullish and bearish waves.
Adaptive Transparency
When enabled, the transparency of the waves will adjust based on the strength of the signal.
Best Practices & Usage
Confirm Trend Strength: In an uptrend, the appearance of bullish waves confirms strong buying interest and suggests the trend is likely to continue. The opposite is true for bearish waves in a downtrend.
Spot Absorption: If the price is falling but bullish waves start to appear, it can be a sign that buyers are absorbing the selling pressure, which often precedes a reversal to the upside.
Use in Conjunction with Other Tools: Liquidity Waves are most powerful when used to confirm signals from other tools. For example, a buy signal combined with a strong bullish wave provides a high-confidence entry.
Accumulation/Distributions
Overview
The Accumulation/Distributions feature automatically identifies and draws zones on your chart where institutional traders may be accumulating (buying) or distributing (selling) large positions. These zones are detected using an advanced analysis of volume, order flow, and price action.
Accumulation Zone (Green): A period of quiet buying, often preceding a significant move up.
Distribution Zone (Red): A period of quiet selling, often preceding a significant move down.
This tool helps you spot the "smart money" footprint and position yourself for potentially large market moves.
Settings
You can customize the appearance and display of the Accumulation/Distribution zones.
Accumulation/Distributions
Enables or disables the detection of accumulation and distribution zones.
Bullish/Bearish Color
Sets the colors for the accumulation (bullish) and distribution (bearish) zones.
Adaptive Transparency
When enabled, the transparency of the zones will adjust based on their significance.
Show Text / Text Color
Controls the display and color of the text labels for the zones.
Best Practices & Usage
Trade with the Trend: After an accumulation zone, look for bullish trading opportunities. After a distribution zone, look for bearish opportunities.
Use Zones as Support/Resistance: Once an accumulation zone has led to a breakout, it often acts as a strong support level on any subsequent pullbacks. Similarly, a distribution zone can act as strong resistance.
Be Patient: Accumulation and distribution can take time. These zones are best used on higher timeframes (e.g., 1-hour and above) to identify major, long-term opportunities.
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