DC Liquidity Sweep Reversal

DC Liquidity Sweep Reversal

Description

The DC Liquidity Sweep Reversal indicator is designed to identify potential reversal points by confirming price movements that break key levels, followed by a validation within a specified number of bars. This indicator helps traders detect reversals by requiring a bar closure above or below the level within a user-defined window, enhancing the reliability of reversal signals. Ideal for strategies focusing on market turning points, the DC Liquidity Sweep Reversal ensures robust signal validation for improved trading decisions.

Key Features

  • Reversal Detection: Identifies potential reversal points by tracking price movements that break key levels.
  • Validation Window: Confirms the signal within a user-defined number of bars, enhancing the reliability of reversal signals.
  • Customizable Parameters: Offers flexibility with adjustable parameters for validation windows, thresholds, and level definitions.
  • Visual Plots: Displays signals with distinct plots for easy visual interpretation on the chart.

Tips for Implementation

  • Strategic Confirmation: Use this indicator in conjunction with other support and resistance levels to validate reversal signals.
  • Volatility Assessment: Pair with volatility indicators to ensure reversal signals correspond with suitable market environments.
  • Parameter Customization: Adjust the Bar Count Window and Validation Bar Count to fit your trading strategy, ensuring timely and accurate signals.
  • Complementary Indicators: Combine with trend-following indicators such as moving averages to enhance signal validation.
  • Backtesting Necessity: Backtest the indicator across various market conditions to fine-tune settings and validate its effectiveness within your trading system.

Parameters

Bar Count Window:

  • Type: int
  • Description: Number of bars to check for validation after the level break.
  • Default Value: 5
  • Valid Values: Any positive integer greater than or equal to 1

Validation Bar Count:

  • Type: int
  • Description: Minimum number of bars that must close above/below the level to confirm the signal.
  • Default Value: 1
  • Valid Values: Any positive integer greater than or equal to 1

Plot Offset (Ticks):

  • Type: int
  • Description: Distance between the plotted signal and the high or low point of the bar, measured in ticks. This value can be adjusted to fine-tune the visualization of the signal.
  • Default Value: 3
  • Valid Values: Any positive integer

Level DC Period:

  • Type: int
  • Description: Defines the look-back period for detecting key levels.
  • Default Value: 5
  • Valid Values: Any positive integer greater than or equal to 1

Min Bars Since HL:

  • Type: int
  • Description: Minimum number of bars since the last high or low.
  • Default Value: 5
  • Valid Values: Any positive integer greater than or equal to 1

Min FVGs Since HL:

  • Type: int
  • Description: Minimum number of fair value gaps since the last high or low.
  • Default Value: 0
  • Valid Values: Any positive integer greater than or equal to 0

Min Ticks:

  • Type: int
  • Description: Minimum tick distance for validation.
  • Default Value: 10
  • Valid Values: Any positive integer greater than or equal to 0

Min ATR Multiple:

  • Type: int
  • Description: Minimum ATR multiple for validation.
  • Default Value: 1
  • Valid Values: Any positive integer greater than or equal to 0

Min Range Percent:

  • Type: int
  • Description: Minimum range percentage for validation.
  • Default Value: 0
  • Valid Values: Any positive integer greater than or equal to 0

Min Current Day Range Percent:

  • Type: int
  • Description: Minimum current day range percentage for validation.
  • Default Value: 0
  • Valid Values: Any positive integer greater than or equal to 0

ATR Period:

  • Type: int
  • Description: Period for calculating ATR.
  • Default Value: 20
  • Valid Values: Any positive integer greater than or equal to 1

Range DC Period:

  • Type: int
  • Description: Period for calculating the range.
  • Default Value: 100
  • Valid Values: Any positive integer greater than or equal to 1

Bars Validity:

  • Type: int
  • Description: Number of bars the level remains valid.
  • Default Value: 200
  • Valid Values: Any positive integer greater than or equal to 1

Sessions Validity:

  • Type: int
  • Description: Number of sessions the level remains valid.
  • Default Value: 1
  • Valid Values: Any positive integer greater than or equal to 1

Plots

IndicatorSignalUp:

  • Type: Plot
  • Style: Triangle Up
  • Color: DeepSkyBlue
  • Description: Indicates a validated upward reversal signal.

SignalUpLowerLevel:

  • Type: Plot
  • Style: Hash
  • Color: DeepSkyBlue
  • Description: Indicates the lower level of the upward reversal signal.

IndicatorSignalDown:

  • Type: Plot
  • Style: Triangle Down
  • Color: DeepSkyBlue
  • Description: Indicates a validated downward reversal signal.

SignalDownUpperLevel:

  • Type: Plot
  • Style: Hash
  • Color: DeepSkyBlue
  • Description: Indicates the upper level of the downward reversal signal.