OPEN-SOURCE SCRIPT
Liquidity Swings & Range Detector [MED89]
### Trading Strategy Using the **Liquidity Swings & Range Detector** Indicator
The provided indicator is designed to identify liquidity swings (highs and lows) and detect trading ranges. Below is a step-by-step strategy to utilize it effectively in trading:
---
### 1. **Understanding the Indicator**
- **Liquidity Swings:**
- **Swing Highs:** These represent significant price resistance levels and are highlighted as peaks.
- **Swing Lows:** These represent significant price support levels and are highlighted as troughs.
- **Range Detector:**
- It identifies price ranges where the market is consolidating, using a combination of moving averages and ATR-based thresholds to define the range.
---
### 2. **The Trading Strategy**
#### A) **Buying Opportunities (Long Entries):**
1. **Breakout above Swing Highs:**
- When the price breaks above a recent **Swing High**:
- Confirm the breakout with volume or momentum indicators (e.g., RSI or MACD).
- Enter a long position.
- Place a stop-loss below the previous **Swing High** level.
2. **Within a Range:**
- Buy near the **Bottom Range** (the lower boundary of the detected range).
- Place a stop-loss slightly below the range.
#### B) **Selling Opportunities (Short Entries):**
1. **Breakdown below Swing Lows:**
- When the price breaks below a recent **Swing Low**:
- Confirm the breakdown with volume or momentum indicators.
- Enter a short position.
- Place a stop-loss above the previous **Swing Low** level.
2. **Within a Range:**
- Sell near the **Top Range** (the upper boundary of the detected range).
- Place a stop-loss slightly above the range.
---
### 3. **Range-Based Trading:**
- When the indicator detects a trading range:
- **Buy** at the lower boundary (**Bottom Range**).
- **Sell** at the upper boundary (**Top Range**).
- Avoid trading if the price is moving in the middle of the range unless confirmed by strong directional momentum.
---
### 4. **Risk Management**
- **Position Sizing:** Limit your risk to 2-3% of your capital per trade.
- **Take Profits:** Use the **Swing High** or **Swing Low** levels as logical profit targets.
- **Stop-Loss Placement:** Always place stop-loss orders based on recent **Swing Highs** or **Swing Lows**, depending on your trade direction.
---
### 5. **Additional Tips**
- Test the indicator on a demo account to fine-tune the settings.
- Use other complementary indicators like RSI, MACD, or volume to confirm trade signals.
- Stay updated on market news and events that might cause sudden price movements.
---
BY AHMED ELMORTADA
The provided indicator is designed to identify liquidity swings (highs and lows) and detect trading ranges. Below is a step-by-step strategy to utilize it effectively in trading:
---
### 1. **Understanding the Indicator**
- **Liquidity Swings:**
- **Swing Highs:** These represent significant price resistance levels and are highlighted as peaks.
- **Swing Lows:** These represent significant price support levels and are highlighted as troughs.
- **Range Detector:**
- It identifies price ranges where the market is consolidating, using a combination of moving averages and ATR-based thresholds to define the range.
---
### 2. **The Trading Strategy**
#### A) **Buying Opportunities (Long Entries):**
1. **Breakout above Swing Highs:**
- When the price breaks above a recent **Swing High**:
- Confirm the breakout with volume or momentum indicators (e.g., RSI or MACD).
- Enter a long position.
- Place a stop-loss below the previous **Swing High** level.
2. **Within a Range:**
- Buy near the **Bottom Range** (the lower boundary of the detected range).
- Place a stop-loss slightly below the range.
#### B) **Selling Opportunities (Short Entries):**
1. **Breakdown below Swing Lows:**
- When the price breaks below a recent **Swing Low**:
- Confirm the breakdown with volume or momentum indicators.
- Enter a short position.
- Place a stop-loss above the previous **Swing Low** level.
2. **Within a Range:**
- Sell near the **Top Range** (the upper boundary of the detected range).
- Place a stop-loss slightly above the range.
---
### 3. **Range-Based Trading:**
- When the indicator detects a trading range:
- **Buy** at the lower boundary (**Bottom Range**).
- **Sell** at the upper boundary (**Top Range**).
- Avoid trading if the price is moving in the middle of the range unless confirmed by strong directional momentum.
---
### 4. **Risk Management**
- **Position Sizing:** Limit your risk to 2-3% of your capital per trade.
- **Take Profits:** Use the **Swing High** or **Swing Low** levels as logical profit targets.
- **Stop-Loss Placement:** Always place stop-loss orders based on recent **Swing Highs** or **Swing Lows**, depending on your trade direction.
---
### 5. **Additional Tips**
- Test the indicator on a demo account to fine-tune the settings.
- Use other complementary indicators like RSI, MACD, or volume to confirm trade signals.
- Stay updated on market news and events that might cause sudden price movements.
---
BY AHMED ELMORTADA
Open-source script
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