Liquidity Concepts [BigBeluga] — Indicator by BigBeluga (2024)

The Liquidity Concepts indicator is designed to represent the liquidity on the chart using pivot points as potential stop-losses / liquidity grabs.

The indicator is facilitated by a market structure detector and pivot points to identify resting liquidity / stop-loss levels.

A liquidity grab or a stop-loss hunt is when retail traders place their stop-loss orders at recent highs / most recent highs or lows. This is a spot where big players attempt to push the market to trigger all the stop-loss orders and gain a better entry in their favor.

🔶 CALCULATION
The indicator uses the Higher Lower script made by @LonesomeTheBlue to determine these pivot points. When a pivot point is formed, it is displayed on the chart with the corresponding symbol (HH - HL - LH - LL). When one of these points is broken, a line is drawn between the pivot point and the candle that broke it.

A liquidity grab is only recognized after it has occurred, and it is represented with a box showing all the candles that were involved in the sweep / stop-loss hunt.

A pivot point is established only after the selected lookback period and cannot be printed beforehand in any manner. This ensures that it captures the highest point within the lookback period following the candle formation.

An HL (Higher Low) point is established when it is lower than an HH (Higher High) point, whereas an LH (Lower High) point is established when it is higher than an LL (Lower Low) point.

Boxes are formed in two different types: Major and Minor.
- Major boxes occur when LH or HL points are breached, with their high or low point crossing above or below in the specific lookback period.
- Minor boxes occur when HH or LL points are breached, with their high or low point crossing above or below in the specific lookback period.

Minor points are less efficient since they represent key highs and lows, and before taking out those liquidity levels, the HL and LH points should be cleared.

Representation of Pivot Point Formation:

Liquidity wicks are a minor representation of a stop-loss hunt during the retracement of a pivot point. This means that a pivot point is broken only by the wick and not by the entire body.
Bigger wick = more liquidity
Lower wick = less liquidity

Liquidity wicks can be used as trade confirmation or targets for your entry to enhance accuracy.

Users have the option to display candle coloring based on the currently detected trend.

🔶 VERIFICATION
Users have the option to specify the verification length for when the liquidity should occur. This means that if the length is set to 7, the indicator will search for the liquidity formation within the last 7 candles; otherwise, it will be considered invalid.

🔶 CONCEPTS
The whole idea is to help find possible zone of stop loss hunting helping having a better entry in our trading, we can utilize a lot more tools, and this shoud be used as confluence only

🔶 OPTIONS
Users have complete control over the settings, allowing them to:

- Disable pivot points.
- Disable the display of boxes.
- Disable liquidity wicks.
- Customize colors to their preferences.
- Adjust lookback settings for historical data analysis.
- Modify candle coloring settings.
- Adjust the text size of labels for better readability and customization.

🔶 RECAP
Box => Represents liquidity formation / stop-loss hunt
- Minor Box HH / LL point
- Major Box LH / HL point

Liquidity Wicks => Formed when a pivot point is broken only by the wick

BOS / CHoCH => Calculated using the pivot points from the @LonesomeTheBlue script

🔶 RELATED SCRIPTS
Price Action Concepts =>

Open-source script

Disclaimer