Liquidity Sweep Filter [AlgoAlpha]

Feb 19

Unlock a deeper understanding of market liquidity with the Liquidity Sweep Filter by AlgoAlpha. This indicator identifies liquidity sweeps, highlighting key price levels where large liquidations have occurred. By visualizing major and minor liquidation events, traders can better anticipate potential reversals and market structure shifts, making this an essential tool for those trading in volatile conditions.

Key Features:

1. 🔍 Liquidity Sweep Detection – Identifies and highlights areas where liquidity has been swept, distinguishing between major and minor liquidation events.
   
2. 📊 Volume Profile Integration – Displays a volume profile overlay, helping traders spot high-activity price zones where the market is likely to react.
   
3. 📈 Trend-Based Filtering – Utilizes an adaptive trend detection algorithm to refine liquidity sweeps based on market direction, reducing noise.
   
4. 🎨 Customizable Visualization – Modify colors, thresholds, and display settings to tailor the indicator to your trading style.
   
5. 🔔 Alerts for Liquidity Sweeps & Trend Changes – Stay ahead of the market by receiving alerts when significant liquidity events or trend shifts occur.
   

How to Use:

• 🛠 Add the Indicator: Add the Liquidity Sweep Filter to your chart and configure the settings based on your preferred sensitivity. Adjust the major sweep threshold to filter out smaller moves.
  
• 📊 Analyze Liquidity Zones and trend direction: Look for liquidation levels where large buy or sell stops have been triggered. Major sweeps indicate strong reactions, while minor sweeps show gradual liquidity absorption. You can also see which levels are high in liquidity by the transparency of the levels.
  
• 🔔Set-Up Alerts: Use the in-built alerts so you don't miss a trading opportunity
  

How It Works:
The Liquidity Sweep Filter detects liquidity events by tracking swing highs and lows (defined as a pivot where neighboring candles are lower/higher than it) where traders are likely to have placed stop-loss orders. It evaluates volume and price action, marking areas where liquidity has been absorbed by the market. Additionally, the integrated trend filter ensures that only relevant liquidity sweeps are highlighted based on market direction, lows in an uptrend and highs in a downtrend. The trend filter works by calculating a basis, and defining trend shifts when the closing price crosses over the upper or lower bands.The included volume profile further enhances analysis by displaying key trading zones where price may react.

Feb 19

Release Notes

- Minor text changes.

Feb 20

Release Notes

Fixed some bugs, added a warning for tickers with no volume.