OPEN-SOURCE SCRIPT
Liquidity Spike Pool
The “Liquidity Pools” indicator is a tool for market analysts that stands out for its ability to clearly project the intricate zones of manipulation present in financial markets. These crucial territories emerge when supply or demand takes over, resulting in long shadows (wicks) on the chart candles. Imagine these regions as "magnets" for prices, as they represent authentic "liquidity pools" where the flow of money into the market is significantly concentrated. But the value of the indicator goes beyond this simple visualization: these zones, when identified and interpreted correctly, can play a crucial role for traders looking for profitable entry points. They can mutate into important bastions of support or resistance, providing traders with key anchor points to make informed decisions within their trading strategies.
A key aspect to consider is the importance of different time frames in analyzing markets. Larger time frames, such as daily or 4h, tend to host larger and more relevant liquidity zones. Therefore, a successful strategy might involve identifying these areas of manipulation over longer time frames through the use of this indicator, and then applying these findings to shorter time frames. This approach allows you to turn manipulation zones into crucial reference points that merit constant surveillance while making trading decisions on shorter time frames.
The indicator uses color to convey information clearly and effectively:
- Dark blue lines highlight candles with significant upper wick, signaling the possible presence of an important manipulation area in the considered area.
- Dark red lines are reserved for sizable candlesticks with significant upper wick, emphasizing situations that are particularly relevant to traders.
- Dark gray lines highlight candles with significant lower wick, providing a valuable indication of manipulation zones where the bid may have prevailed.
- White lines highlight sizable candlesticks with significant lower wick, clearly indicating situations where demand has been predominant and may have helped form a liquidity pool.
This indicator constitutes an important resource for identifying and clearly displaying candles with significant wicks, allowing traders to distinguish between ordinary market conditions and circumstances particularly relevant to their trading strategies. Thanks to the distinctive colors of the lines, the indicator offers intuitive visual guidance, allowing traders to make more informed decisions while carrying out their analyses.
A key aspect to consider is the importance of different time frames in analyzing markets. Larger time frames, such as daily or 4h, tend to host larger and more relevant liquidity zones. Therefore, a successful strategy might involve identifying these areas of manipulation over longer time frames through the use of this indicator, and then applying these findings to shorter time frames. This approach allows you to turn manipulation zones into crucial reference points that merit constant surveillance while making trading decisions on shorter time frames.
The indicator uses color to convey information clearly and effectively:
- Dark blue lines highlight candles with significant upper wick, signaling the possible presence of an important manipulation area in the considered area.
- Dark red lines are reserved for sizable candlesticks with significant upper wick, emphasizing situations that are particularly relevant to traders.
- Dark gray lines highlight candles with significant lower wick, providing a valuable indication of manipulation zones where the bid may have prevailed.
- White lines highlight sizable candlesticks with significant lower wick, clearly indicating situations where demand has been predominant and may have helped form a liquidity pool.
This indicator constitutes an important resource for identifying and clearly displaying candles with significant wicks, allowing traders to distinguish between ordinary market conditions and circumstances particularly relevant to their trading strategies. Thanks to the distinctive colors of the lines, the indicator offers intuitive visual guidance, allowing traders to make more informed decisions while carrying out their analyses.
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.