• Overview
  • Reviews (2)
  • Comments (2)
  • What's new

Liquidity Breaks and Swings

5

See "What's New" for a breakdown of the newest functions. v1.4 was just a tidy up, nothing special

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I've created this because I needed a customisable fractal indicator. It also checks for decreasing volumes to have some kind of confirmation. Breakdown below:

Overview

This indicator is designed to help identify key swing points in the market by analyzing price action and volume dynamics.

Features

The core of the indicator's strategy is based on identifying high and low patterns that often precede significant price movements. These patterns are determined by scanning the chart to look for candles with:

  1. Bearish Candle Patterns: Identified when a candle's high is higher than a [User Adjustable] minimum number of preceding(Default 5) and following(Default 3) candles. Only marking it, if the candle also has a [User Adjustable] number of decreasing volume bars preceding it.

  2. Bullish Candle Patterns: Identified when a candle's low is lower than a [User Adjustable] minimum number of preceding(Default 5) and following(Default 3) candles. Only marking it, if the candle also has a [User Adjustable] number of decreasing volume bars preceding it.

Break Line Drawing

Once a candle is identified, the indicator draws a line at the high or low of the candle. If a subsequent candle breaks above a high candle or below a low candle, the line is then converted to a dashed line, extending to the point of the break.

The number of all identified candles can be entered in the properties section, as well as an option to extend unbroken levels to the live candle.

Break Grade Classification

Each dashed line is assigned a grade based on the number of candles between the identified pattern and the break:

  • "Great Swing": Extends 150 or more candles.
  • "Not Bad Swing": Extends 110 to 139 candles.
  • "OK Swing": Extends 70 to 109 candles.
  • "Avg. Swing": Extends 30 to 69 candles.
  • "Unmarked Swing": Extends less than 30 candles.

Fibonacci Retracement (optional)

The indicator also includes an automatic Fibonacci retracement feature that is dynamically drawn based on the identified swing points:

  • In an uptrend, the Fibonacci retracement is drawn from the low of the lowest identified candle to the high of the highest identified candle.
  • In a downtrend, the retracement is drawn from the high of the highest identified candle to the low of the lowest identified candle.

The identification of an up- or downtrend in this case is based on the highest or lowest identified candle's proximity to the live candle i.e.: If the highest identified candle is closer to our live candle, the code will evaluate it as an uptrend and vice-versa.


It's recommended to switch off the grid in order to use this one.


Reviews 2
Jaydeep Jaganbhai Patel
322
Jaydeep Jaganbhai Patel 2024.10.18 05:13 
 

good indicator.

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Jaydeep Jaganbhai Patel
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Jaydeep Jaganbhai Patel 2024.10.18 05:13 
 

good indicator.

arpad f.
18
arpad f. 2024.09.11 20:22 
 

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Version 1.4 2024.09.14
Minor bug fixes.
Version 1.3 2024.09.13
New Features of v1.3:

-Fifth option to use a "sequential" volume decrease condition as it was in v1.0; Now when switching to "Sequential", the Volume Tolerance tells the code how many increasing volume bars are allowed within the scope of the decreasing previous volume bars. When switching to either one of the MA methods, the Volume Tolerance adapts and turns back to percentage (0.05 = 5%)

-Sixth option for volume condition: You can now turn off volume conditions completely.

-Bypassing volume checks: When OFF is selected, the volume conditions are bypassed, and the indicator focuses solely on candle patterns.

-Flexible volume tolerance: Different handling of VolumeTolerance depending on the selected method (percentage or sequential count).

-Streamlined pattern identification: Candle patterns can now be identified with or without volume checks.

+---------------+

-Swapped the grading texts to wingdings to avoid clutter & changed the grading principles to allow for the correction in logic, you'll notice the amount of identified
candles has significatnly decreased:
-Great Swing: over 140 candles | OBJPROP_ARROWCODE, 176
-Not Bad Swing: between 90 and 139 candles | OBJPROP_ARROWCODE, 252
-Avg. Swing: between 20 and 89 candles | OBJPROP_ARROWCODE, 119
-Weak Swing: below 20 candles, NOT MARKED

+---------------+

-Added a 76.8% Fib level, as well as made the fib retracement colour customisable.

+---------------+

The Revamped Volume Conditions Breakdown:

1. Volume Window:
-This is the number of candles you look at to check whether the volume is decreasing.
-For example, if the VolumeWindow is set to 5, the system looks at the last 5 candles' volume and checks if they show a general pattern of decreasing volume.

2. Volume Tolerance:
-This is a percentage threshold that defines how much the volume needs to decrease for it to be considered significant.
-A lower tolerance (e.g., 0.05 or 5%) means that even a small decrease in volume counts, while a higher tolerance requires a steeper drop in volume for the candle to pass the rule.
-For example, if VolumeTolerance is 5%, the current candle’s volume must be at least 5% lower than the average volume over the previous candles to pass the test.

3. Moving Averages:
-The volume is not just compared directly candle-to-candle. Instead, it’s compared against a moving average of the volume, which gives a smoother and more reliable measure of how volume is behaving over time.

-There are four types of moving averages you can choose from depending on your strategy:
-SMA (Simple Moving Average): A straightforward average of the volumes over the window. Every candle is treated equally. Mid-term
-EWMA (Exponentially Weighted Moving Average): Gives more weight to recent candles. So, if recent volumes are changing, it reacts faster than the SMA. Intra-day
-SMMA (Smoothed Moving Average): This averages out the data even more slowly, making it less sensitive to short-term changes but better for identifying long-term
trends. Long Term
-LWMA (Linear Weighted Moving Average): Similar to EWMA but with a linear weighting, meaning the most recent candle has the most influence, but older candles still
matter (a little bit). Ultra Short-Term / Intra-Hour

4. How It Works Together:
The system looks at the VolumeWindow number of candles and calculates the selected moving average (SMA, EWMA, SMMA, or LWMA).
It then compares the current candle’s volume to the moving average and checks if it has dropped by the percentage set (Default 0.001 -0.1%) in the VolumeTolerance.
If the current volume is lower than the moving average by the required percentage, the volume is considered to be "decreasing" for that candle and only then the code will check if the candle fits the candle pattern conditions.

//+---------------------------------------------------------------------------------------------------------------+
Version 1.2 2024.09.13
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Version 1.1 2024.09.12
-The logic to identify candles & draw lines has been corrected to include (lol) the volume criteria, now it will only draw the lines if all criteria has been met...

-Swapped the grading texts to wingdings to avoid clutter & changed the grading principles to allow for the correction in logic, you'll notice the amount of identified candles has significatnly decreased:
-Great Swing: over 140 candles | OBJPROP_ARROWCODE, 176
-Not Bad Swing: between 90 and 139 candles | OBJPROP_ARROWCODE, 252
-Avg. Swing: between 20 and 89 candles | OBJPROP_ARROWCODE, 119
-Weak Swing: below 20 candles, NOT MARKED

-Added a 76.8% Fib level, as well as made the fib retracement colour customisable.