OPEN-SOURCE SCRIPT
Liquidity Trap & Reversal bot [Point algo]
The Psychology of the Liquidity Trap
Retail traders are taught to place their Stop Losses just above previous swing highs or just below previous swing lows. Market makers and institutional algorithms often drive price into these "pockets of liquidity" to fill their own large orders. This script identifies the specific 111% – 113% "Sweet Spot" where these traps frequently occur.
The 111% Liquidity Trap & Reversal is a structural tool that maps out these institutional "Stop Run" zones and provides execution signals when price fails to sustain a breakout and returns to its previous range.
How the Logic Works
1. Swing Identification: The script finds significant Pivot Highs and Lows based on a user-defined lookback period.
2. The Trap Zone: It calculates the Fibonacci-derived extensions specifically favored by institutional models:
3. The Reversal Signal: A "REVERSAL" signal is triggered only if price penetrates the 111% zone and then crosses back inside the original pivot level. This confirms the "Sweep" and a shift in momentum.
4. Breakout/Breakdown (BO/BD): To provide a complete picture of market structure, the script also marks successful breakouts where price closes decisively beyond the pivot without reversing.
Key Features
How to Trade with It
[#] The Reversal: Look for a "REVERSAL" arrow. This is a high-probability setup indicating that the "Breakout Traders" have been trapped and the market is likely to rotate to the opposite end of the range.
[#] The Breakout (BO/BD): If price crosses the pivot and a "BO" or "BD" label appears without hitting the trap zone first, it signifies structural strength and trend continuation.
[#] Filtering: Use the "Pivot Lookback" setting to switch between Micro-Scalping (Lower numbers) and Macro-Trend analysis (Higher numbers).
Rules :
1. Transparency: All math—from the pivot calculations to the extension percentages—is fully visible in the source code.
2. No "Holy Grail" Claims: This is a technical analysis tool designed to identify historical price patterns. It does not predict future movements with certainty.
Retail traders are taught to place their Stop Losses just above previous swing highs or just below previous swing lows. Market makers and institutional algorithms often drive price into these "pockets of liquidity" to fill their own large orders. This script identifies the specific 111% – 113% "Sweet Spot" where these traps frequently occur.
The 111% Liquidity Trap & Reversal is a structural tool that maps out these institutional "Stop Run" zones and provides execution signals when price fails to sustain a breakout and returns to its previous range.
How the Logic Works
1. Swing Identification: The script finds significant Pivot Highs and Lows based on a user-defined lookback period.
2. The Trap Zone: It calculates the Fibonacci-derived extensions specifically favored by institutional models:
- 111% – 113%: The primary "Trap Zone" where price often wicks into before reversing.
- 127.2%: The secondary "Deep Sweep" level.
3. The Reversal Signal: A "REVERSAL" signal is triggered only if price penetrates the 111% zone and then crosses back inside the original pivot level. This confirms the "Sweep" and a shift in momentum.
4. Breakout/Breakdown (BO/BD): To provide a complete picture of market structure, the script also marks successful breakouts where price closes decisively beyond the pivot without reversing.
Key Features
- Visual Trap Zones: Red (Short) and Lime (Long) zones plotted as step-lines for a clean, non-repainting view of where the traps are set.
- Dual-Signal Logic: Differentiates between a failed breakout (Reversal) and a successful trend continuation (BO/BD).
- Institutional Extensions: Uses the 1.11 and 1.13 ratios, which are mathematically grounded in price-action theory but often overlooked by standard Fibonacci tools.
How to Trade with It
[#] The Reversal: Look for a "REVERSAL" arrow. This is a high-probability setup indicating that the "Breakout Traders" have been trapped and the market is likely to rotate to the opposite end of the range.
[#] The Breakout (BO/BD): If price crosses the pivot and a "BO" or "BD" label appears without hitting the trap zone first, it signifies structural strength and trend continuation.
[#] Filtering: Use the "Pivot Lookback" setting to switch between Micro-Scalping (Lower numbers) and Macro-Trend analysis (Higher numbers).
Rules :
1. Transparency: All math—from the pivot calculations to the extension percentages—is fully visible in the source code.
2. No "Holy Grail" Claims: This is a technical analysis tool designed to identify historical price patterns. It does not predict future movements with certainty.
Script de código aberto
Em verdadeiro espírito do TradingView, o criador deste script o tornou de código aberto, para que os traders possam revisar e verificar sua funcionalidade. Parabéns ao autor! Embora você possa usá-lo gratuitamente, lembre-se de que a republicação do código está sujeita às nossas Regras da Casa.
Unlock powerful tools & indicators → pointalgo.com
Aviso legal
As informações e publicações não se destinam a ser, e não constituem, conselhos ou recomendações financeiras, de investimento, comerciais ou de outro tipo fornecidos ou endossados pela TradingView. Leia mais nos Termos de Uso.
Script de código aberto
Em verdadeiro espírito do TradingView, o criador deste script o tornou de código aberto, para que os traders possam revisar e verificar sua funcionalidade. Parabéns ao autor! Embora você possa usá-lo gratuitamente, lembre-se de que a republicação do código está sujeita às nossas Regras da Casa.
Unlock powerful tools & indicators → pointalgo.com
Aviso legal
As informações e publicações não se destinam a ser, e não constituem, conselhos ou recomendações financeiras, de investimento, comerciais ou de outro tipo fornecidos ou endossados pela TradingView. Leia mais nos Termos de Uso.