FULL DESCRIPTION:
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Liquidity Shock Detector identifies significant price movements that often indicate institutional activity. When large market participants enter or exit positions, they create liquidity zones that price frequently revisits. This indicator automatically detects these zones and provides real-time trend analysis across multiple timeframes.
How It Works
The indicator monitors price velocity and candle size to detect sudden movements. When a significant move occurs, a validation period confirms whether the zone holds. Validated zones are displayed on the chart with clear visual markers showing zone strength and direction.
Key Features
- Automatic detection of liquidity shock zones based on price velocity and ATR
- Self-learning threshold that adapts to current market conditions
- Zone flip detection: bullish zones flip to bearish when price closes through, and vice versa
- Multi-timeframe trend analysis showing M15, M30 and H1 candle direction
- HTF trend alignment check using EMA crossover on higher timeframe
- Session detection highlighting London, New York and Overlap trading hours
- Volume spike confirmation for additional zone strength validation
- Buy and sell signals generated on wick rejections from active zones
Zone Behavior
When a liquidity shock is detected, the indicator creates a zone based on the candle direction. Bullish zones act as support and generate buy signals on wick rejections. Bearish zones act as resistance and generate sell signals. If price closes through a zone, it automatically flips direction. A bullish support zone becomes bearish resistance, and a bearish resistance zone becomes bullish support. This flip behavior reflects how institutional levels often change role after being broken.
Dashboard Display
The indicator includes a comprehensive dashboard showing:
- Current session with color coding
- Detection count and learning status
- Active zone information with strength rating
- Trend analysis score from multiple factors
- Multi-timeframe candle direction
- Trade recommendation based on confluence
Trend Analysis Scoring
The indicator calculates a score based on:
- HTF trend alignment with zone direction
- Trading session quality
- Volume confirmation
- Zone freshness
- Price proximity to zone
- Moving average structure
- Multi-timeframe candle alignment
Recommendations range from High Probability to Weak based on the total score.
Recommended Settings
The indicator works on any timeframe. Default settings are optimized for XAUUSD but can be adjusted for other instruments. Validation period of 5-10 bars is recommended to filter false signals.
Input Parameters
Detection Settings: Tick window, threshold points, standard deviation multiplier, cooldown period
Candle Detection: ATR period, candle multiplier for large candle detection
Strength Boosters: HTF period, volume multiplier, session filtering options
Validation: Number of bars required for zone confirmation
Zone Display: Colors, extension settings, midline and strength label options
Dashboard: Position, colors, enable/disable options
Alerts: Sound, push notification, alert on detection/signal/flip
