Trend Liquidity

The Liquidity Sweep Filter is an institutional-grade Smart Money Concepts (SMC) & Order Flow indicator designed for MetaTrader 5. It tracks market trend direction using adaptive smoothed deviation bands while dynamically mapping resting stop-loss liquidity (Swing Highs and Swing Lows).

When price hunts and absorbs these liquidity pools, the indicator flags the event with on-chart Sweep Dots, measures the absorbed volume via Volume Badges, and displays an anchored Volume Profile for the current market cycle.

How the Engine Works

1. Double-Smoothed Trend Filter:

   • Calculates an initial Exponential Moving Average (EMA), followed by a Simple Moving Average (SMA) of that EMA.

   • Creates an envelope using Mean Absolute Deviation smoothed over Length × 3.

   • A breakout above the upper band establishes a bullish trend; a breakdown below the lower band establishes a bearish trend.

2. Swing Liquidity Pool Detection:

   • In a downtrend, whenever a 3-bar swing high forms beneath the upper band, a red horizontal liquidity level is created and tracked.

   • In an uptrend, whenever a 3-bar swing low forms above the lower band, a green horizontal liquidity level is created and tracked.

3. Sweep Absorption & Volume Normalization:

   • When price pierces an active liquidity line, the line terminates (swept).

   • The volume of the swept candle is normalized (

     0 − 100 % 0−100%

     ) against rolling volume history.

   • If normalized volume exceeds the Major Sweep Threshold (default 50), it is classified as a Strong Sweep (large institutions absorbed stops).

4. Dynamic Trend-Anchored Volume Profile:

   • Automatically isolates the bars from the most recent trend flip to the current candle.

   • Bins the volume across price tiers to visually highlight where smart money accumulated or distributed.

How to Trade With This Indicator

1. Trend-Continuation Pullback (Highest Win Rate)

• Bullish Setup:

  1. Main trend is Green (trend > 0).

  2. Price pulls back into a green horizontal liquidity line or near the lower band.

  3. A Green Sweep Dot (●) forms below a candle, showing that retail sell-stops were swept and bought up.

  4. Look for a long entry with a stop below the sweep wick.

• Bearish Setup:

  1. Main trend is Red (trend < 0).

  2. Price retraces up toward a red horizontal liquidity line or near the upper band.

  3. A Red Sweep Dot (●) forms above a candle, showing buy-stops were hunted.

  4. Look for a short entry with a stop above the sweep wick.

2. Exhaustion / Counter-Trend Reversal

• When multiple Strong Sweeps occur consecutively with massive volume text tags (e.g., > 1.0M) without moving price further in that direction, this signals climax absorption, often preceding a major trend change (▲ or ▼ arrow).