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Liquidation Volume (Zeiierman)
█ Overview
The Liquidation Volume (Zeiierman) indicator highlights real-time long and short liquidations across all timeframes on TradingView. The indicator assists traders in identifying potential liquidation points in the market based on volume and price movements. Liquidation, in this context, refers to the forced closure of a trader's position due to insufficient margin in their account to support open positions, often occurring during significant price movements.
█ How It Works
The indicator operates primarily through the computation of a MomentumAdjustedPrice function, which is applied to volume-weighted prices (open, high, low, close) adjusted for volatility.
█ How to Use
Identifying Support and Resistance Levels: Liquidation data can provide valuable insights into key market levels where significant trading activities occur. These levels often act as support or resistance in the price chart. Support levels are typically where an asset's price finds a floor, as buying interest is significant enough to outweigh selling pressure. Conversely, resistance levels are where an asset's price may find a ceiling, with selling interest outweighing buying pressure. By analyzing liquidation data, traders can identify these critical points.
Start of a New Trend:
The initiation of a new trend can often be identified by a significant shift in liquidation volumes near breakout levels.
Trend Continuations:
Trend continuations are periods where the current trend is sustained and further confirmed by liquidation patterns. For example, in an uptrend, continuous short liquidations might occur, suggesting that the trend is strong and likely to persist as bearish traders keep getting squeezed out. In a downtrend, continuous long liquidations can serve as confirmation that the trend is still in place. Recognizing these patterns in liquidation data can help traders to stay aligned with the prevailing trend and avoid premature exits or entries against the trend.
Trend Reversals: Patterns in liquidations can be crucial in signaling potential trend reversals. A sudden and significant change in liquidation volumes—like a spike in long liquidations during a downtrend or short liquidations during an uptrend—can indicate that the current trend is losing steam and a reversal may be imminent. This information can be particularly useful for traders looking to anticipate market turns and adjust their strategies accordingly.
█ Settings
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Disclaimer
The information contained in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell any securities of any type. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.
All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
The Liquidation Volume (Zeiierman) indicator highlights real-time long and short liquidations across all timeframes on TradingView. The indicator assists traders in identifying potential liquidation points in the market based on volume and price movements. Liquidation, in this context, refers to the forced closure of a trader's position due to insufficient margin in their account to support open positions, often occurring during significant price movements.
█ How It Works
The indicator operates primarily through the computation of a MomentumAdjustedPrice function, which is applied to volume-weighted prices (open, high, low, close) adjusted for volatility.
█ How to Use
Identifying Support and Resistance Levels: Liquidation data can provide valuable insights into key market levels where significant trading activities occur. These levels often act as support or resistance in the price chart. Support levels are typically where an asset's price finds a floor, as buying interest is significant enough to outweigh selling pressure. Conversely, resistance levels are where an asset's price may find a ceiling, with selling interest outweighing buying pressure. By analyzing liquidation data, traders can identify these critical points.
Start of a New Trend:
The initiation of a new trend can often be identified by a significant shift in liquidation volumes near breakout levels.
Trend Continuations:
Trend continuations are periods where the current trend is sustained and further confirmed by liquidation patterns. For example, in an uptrend, continuous short liquidations might occur, suggesting that the trend is strong and likely to persist as bearish traders keep getting squeezed out. In a downtrend, continuous long liquidations can serve as confirmation that the trend is still in place. Recognizing these patterns in liquidation data can help traders to stay aligned with the prevailing trend and avoid premature exits or entries against the trend.
Trend Reversals: Patterns in liquidations can be crucial in signaling potential trend reversals. A sudden and significant change in liquidation volumes—like a spike in long liquidations during a downtrend or short liquidations during an uptrend—can indicate that the current trend is losing steam and a reversal may be imminent. This information can be particularly useful for traders looking to anticipate market turns and adjust their strategies accordingly.
- Spot Potential Liquidation Points: By observing the liquidation candles and their colors, traders can identify where large liquidations are likely occurring, signaling potential market turning points.
- Understand Market Sentiment: Changes in liquidation volumes can provide insights into bullish or bearish sentiment, helping traders gauge the market mood. By observing liquidation patterns and clusters, traders can get insights into prevailing market sentiments and emerging trends.
█ Settings
- Liquidation Source: Allows selection between 'Price' and 'Volume' for liquidation analysis.
- Volume Period: Determines the period over which volume is averaged.
- Volatility Period: Sets the length for calculating standard deviation, influencing the volatility measure.
- Candle Display Toggle: Enables or disables the display of liquidation candles on the chart.
- Threshold: Sets the level at which liquidation bars are triggered.
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Disclaimer
The information contained in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell any securities of any type. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.
All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
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Access my indicators at: linktr.ee/zeiierman_trading
Earn $15
tradingview.com/gopro/?share_your_love=Zeiierman
SMC Trading
linktr.ee/zeiierman_trading
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.