OPEN-SOURCE SCRIPT
Liquidity Rejection Study
The Liquidity Rejection Study is a specialized technical analysis tool designed to identify and visualize price exhaustion at key historical levels. By focusing on the relationship between price action, volume, and established pivot zones, this study helps traders distinguish between minor price fluctuations and significant structural shifts in market control.
Traders utilize the Liquidity Rejection Study to monitor institutional "footprints" left at supply and demand zones, providing a cleaner perspective on market reversals and trend continuation.
Calculation
The study operates through a multi-stage validation engine to ensure that only the most significant technical events are highlighted.
Visuals and Interpretation
To maintain professional chart clarity, the study uses non-suggestive geometric markers:
Inputs
Macro Baseline (EMA 200)
An optional trend filter. When enabled, the study only highlights rejections that align with the long-term institutional trend.
Pivot Lookback
The number of bars used to calculate the highest and lowest historical levels. A higher value results in more significant, longer-term zones.
Volume Threshold Multiplier
Adjusts the sensitivity of the volume filter. A value of 1.2, for example, requires volume to be 20% higher than the 20-period average to validate a rejection.
Volatility (ATR) Period
Sets the lookback for the Average True Range, which defines the "proximity zone" around the pivots where rejections are considered valid.
Traders utilize the Liquidity Rejection Study to monitor institutional "footprints" left at supply and demand zones, providing a cleaner perspective on market reversals and trend continuation.
Calculation
The study operates through a multi-stage validation engine to ensure that only the most significant technical events are highlighted.
- 1. Structural Mapping: The indicator identifies local price extremes (Highest Highs and Lowest Lows) over a user-defined lookback period. These levels serve as the baseline for the liquidity zones.
2. Wick-to-Body Exhaustion: The study analyzes the anatomy of each candle interacting with these zones. A rejection is identified when a candle displays a high wick-to-body ratio (at least 2:1), indicating a failed attempt to breach the level.
3. Volume-Weighted Confirmation: To validate the rejection, the script requires a surge in volume relative to its moving average. This confirms that the price movement is backed by market liquidity.
4. Pivot Breach Validation: A "State Change" is only confirmed once the price successfully breaks the high (for bullish) or low (for bearish) of the rejection candle within a narrow time window.
Visuals and Interpretation
To maintain professional chart clarity, the study uses non-suggestive geometric markers:
- Structural Diamonds: Confirmed rejections and structural shifts are marked with small diamond shapes. These signify points of high technical interest for discretionary analysis.
Historical Pivot Segments: The upper and lower boundaries used for the study are plotted as discrete lines, visualizing the active "liquidity ceiling" and "liquidity floor."
Inputs
Macro Baseline (EMA 200)
An optional trend filter. When enabled, the study only highlights rejections that align with the long-term institutional trend.
Pivot Lookback
The number of bars used to calculate the highest and lowest historical levels. A higher value results in more significant, longer-term zones.
Volume Threshold Multiplier
Adjusts the sensitivity of the volume filter. A value of 1.2, for example, requires volume to be 20% higher than the 20-period average to validate a rejection.
Volatility (ATR) Period
Sets the lookback for the Average True Range, which defines the "proximity zone" around the pivots where rejections are considered valid.
Skrip open-source
Dengan semangat TradingView yang sesungguhnya, pembuat skrip ini telah menjadikannya sebagai sumber terbuka, sehingga para trader dapat meninjau dan memverifikasi fungsinya. Salut untuk penulisnya! Meskipun Anda dapat menggunakannya secara gratis, perlu diingat bahwa penerbitan ulang kode ini tunduk pada Tata Tertib kami.
Pernyataan Penyangkalan
Informasi dan publikasi ini tidak dimaksudkan, dan bukan merupakan, saran atau rekomendasi keuangan, investasi, trading, atau jenis lainnya yang diberikan atau didukung oleh TradingView. Baca selengkapnya di Ketentuan Penggunaan.
Skrip open-source
Dengan semangat TradingView yang sesungguhnya, pembuat skrip ini telah menjadikannya sebagai sumber terbuka, sehingga para trader dapat meninjau dan memverifikasi fungsinya. Salut untuk penulisnya! Meskipun Anda dapat menggunakannya secara gratis, perlu diingat bahwa penerbitan ulang kode ini tunduk pada Tata Tertib kami.
Pernyataan Penyangkalan
Informasi dan publikasi ini tidak dimaksudkan, dan bukan merupakan, saran atau rekomendasi keuangan, investasi, trading, atau jenis lainnya yang diberikan atau didukung oleh TradingView. Baca selengkapnya di Ketentuan Penggunaan.