Liquidity Delta Profiler
- Indicators
- Version: 1.0
A practical guide to reading and trading with the Liquidity Delta Profiler indicator.
1. What this indicator does
Markets gravitate toward liquidity — clusters of stop-loss and pending orders that sit just beyond obvious swing highs and lows. This tool does three things:
- Maps the liquidity zones above and below price (where stops are likely resting).
- Profiles the volume delta inside each zone, splitting the zone into four horizontal quadrants so you can see where buying or selling pressure is concentrated.
- Flags potential reversals when price sweeps a zone with an unusual delta pattern, and tracks how those signals performed.
It is a decision-support / context tool, not a standalone buy/sell system. Its strength is telling you whether a liquidity grab was real demand or a trap.
2. The building blocks
2.1 Liquidity zones (BSL / SSL)
| Zone | Built from | Location | Meaning |
|---|---|---|---|
| BSL (Buy-Side Liquidity) | A confirmed swing high (pivot high) | Above price | Resistance. Buy stops / breakout orders rest here. |
| SSL (Sell-Side Liquidity) | A confirmed swing low (pivot low) | Below price | Support. Sell stops / breakout orders rest here. |
- A zone spans from the swing extreme to the candle body of the pivot bar (not the full wick), so it represents a realistic order block rather than a single price.
- Zones are confirmed only after Pivot Length bars have closed on each side — this avoids false pivots but means a zone appears with a slight delay.
2.2 The four quadrants
Each zone is divided into 4 equal horizontal slices. As price trades through the zone, the indicator distributes that bar's volume delta into whichever quadrant(s) the candle touched.
- Green quadrant → net buying delta in that slice.
- Red quadrant → net selling delta.
- The number printed is the cumulative signed delta; brighter fill = stronger dominance.
Why this matters: the outer quadrant (the slice nearest the extreme) is the key tell. It shows who was active right at the liquidity grab — the defenders or the breakout crowd.
2.3 Zone health / decay
A xx% label shows the zone's remaining "health". It starts at 100% and drops as volume trades through the zone (capacity = average volume × Zone Volume Capacity ).
- High health (70–100%) → fresh, untested liquidity. Most likely to react.
- Low health (0–30%) → heavily worked. The liquidity is largely absorbed; reactions are weaker and a clean break becomes more likely.
2.4 Sweep
When price trades beyond the zone (high above a BSL top, or low below an SSL bottom), the zone is marked swept (dashed outline, faded). A sweep is the moment of truth — it either confirms a real breakout or sets up a reversal trap.
3. The reversal signals
When a sweep happens with an abnormal delta footprint, the indicator prints one of four bubbles. Red bubble = bearish (reversal down from resistance); green bubble = bullish (reversal up from support). Hover the bubble for a tooltip.
| Code | Name | What it reads | Interpretation |
|---|---|---|---|
| ABS | Absorption at Extreme | The outer quadrant shows large delta against the sweep direction | Big players are absorbing the breakout — a trap. Strongest reversal tell. |
| EXH | Exhaustion (Dry Sweep) | Almost no volume at the extreme edge | The move ran out of fuel; nobody is committing at the highs/lows. |
| DIV | Delta Divergence (FOMO) | Heavy delta trapped at the extreme but price failed to break out (closed back inside) | Late buyers/sellers got trapped — classic failed breakout. |
| REJ | Snapback Rejection | Sweep followed by an immediate strong opposite-delta close | Climax + sharp rejection on the same bar. |
These signals describe why a reversal might happen. They are not entries by themselves — combine them with structure and your own confirmation (see §5).
4. The performance dashboard
The on-chart table tracks how each signal type has performed on the currently loaded data:
- Total — how many of that signal fired.
- Wins — how many reached profit (price moved the expected direction and held for Hold Time bars within the Eval Window ).
- Win % — green if ≥ 50%, red if below.
Use it to learn which signal type works best on your symbol/timeframe. A signal with a high sample size and >55% win rate deserves more of your attention than one with 2 samples.
⚠️ This is a simplified time-based win check, not a backtest with real risk/reward. Treat it as a filter for which signals to trust, not as expectancy.
5. How to trade it
Step 1 — Read context first
Identify the nearest fresh zone (high health) in the direction of your bias. BSL above = where price may grab buy stops; SSL below = where price may grab sell stops.
Step 2 — Wait for the sweep
Let price actually run into the zone and sweep the extreme. No sweep, no setup. Patience here filters most bad trades.
Step 3 — Read the delta footprint
- Reversal setup: outer quadrant delta opposes the sweep (e.g., price sweeps a BSL high but the top quadrant is red/selling). Look for an ABS, DIV, or REJ bubble.
- Continuation setup: outer quadrant delta agrees with the break and the zone health is low → the breakout is more likely genuine; consider trading the break instead.
Step 4 — Confirm
Don't enter on the bubble alone. Add one confirmation:
- A lower-timeframe break of structure in the reversal direction, or
- A strong rejection candle closing back inside the zone, or
- Confluence with HTF support/resistance, a session high/low, or a round number.
Step 5 — Define the trade
- Entry: on confirmation, near the zone edge.
- Stop: just beyond the swept extreme (beyond the wick of the sweep). This is the logical invalidation — if price reclaims it, the trap failed.
- Target: the opposite liquidity zone, prior structure, or a fixed R multiple (e.g., 1.5–2R).
Example — bearish ABS at resistance
- A fresh BSL zone sits above price at a prior swing high.
- Price spikes up and sweeps the zone top → an ABS (red) bubble prints; the top quadrant is heavily red (sellers absorbed the breakout).
- A bearish engulfing candle closes back inside the zone → entry short.
- Stop above the sweep wick; target the nearest SSL zone below.
Example — bullish DIV at support
- A fresh SSL zone sits below price.
- Price flushes down, sweeps the low, but closes back inside → green DIV bubble (trapped sellers).
- Lower-timeframe break of structure up → entry long; stop below the sweep; target the next BSL.
6. Best practices
- Trade fresh zones. Health > 60–70% reacts best. Faded/low-health zones are exhausted.
- Trade with the higher-timeframe trend when possible — reversals against a strong trend are lower probability even with a clean signal.
- Use the dashboard to specialise. If REJ wins 60% on your pair but EXH wins 35%, weight your decisions accordingly.
- Stacked confluence beats a lone signal. Zone + signal + HTF level + session timing is far stronger than any one element.
- One setup at a time. Don't fade every sweep; wait for the clean ones.
7. Recommended settings to experiment with
| Setting | Effect | Tuning tip |
|---|---|---|
| Pivot Length | Larger = fewer, more significant zones | Raise it on lower timeframes / noisy pairs; lower it for more setups |
| Max Zones per Type | How many zones stay on chart | Keep modest (5–10) to avoid clutter |
| Filter Overlapping Zones | Keeps only the most significant level | Leave on for a cleaner chart |
| Zone Volume Capacity | How much volume drains a zone's health | Lower it if zones look "fresh" too long; raise it if they decay too fast |
| Eval Window / Hold Time | Defines a "win" for the dashboard | Match to your typical trade duration |
| Max Bars to Process | Caps history for speed | 1000 is a good balance; raise only if you need older zones |
8. Important limitations
- Volume = tick volume. On most forex feeds this is tick count, not true traded volume. The delta is an estimate derived from the candle body ( volume × (close − open) / range ), the same proxy as the original. It is a directional bias gauge, not real order-flow / bid-ask delta.
- Closed-bar updates. Delta and health update on bar close, so live values can lag the forming candle by one bar versus the original TradingView script.
- Repaint nuance. Zones are confirmed after the pivot's lookforward window; the zone level is fixed once shown, but signals are evaluated as bars develop.
- Symbol-dependent. Behaviour and win rates differ across instruments and timeframes — validate on your own market before trusting it.
9. Disclaimer
This guide and indicator are for educational and informational purposes only. Nothing here is financial, investment, or trading advice. I am not a financial advisor. Trading carries substantial risk of loss; test thoroughly on a demo account and use proper risk management. You are solely responsible for your decisions.
