Smart Money Liquidation Exploits

Smart Money Liquidation Exploits [AlgoAlpha] maps recent swing highs and lows as liquidity levels, then watches how price reacts when these levels are reached. It focuses on liquidity sweeps where price moves beyond a prior swing with the wick but the candle body remains on the other side of the level.

The indicator combines pivot-based liquidity mapping, wick rejection signals, and structure-based take-profit levels. This helps traders separate a liquidity sweep from a simple break through a previous high or low.

It can use the current chart timeframe or a selected higher timeframe. This lets traders view liquidity and sweep signals from broader market structure while staying on a lower-timeframe chart.

• Liquidity Level — A price level formed from a confirmed pivot high or pivot low. Pivot highs represent potential buy-side liquidity, while pivot lows represent potential sell-side liquidity. • Liquidity Sweep — A move where the wick crosses a liquidity level but the candle body stays beyond neither side of that level. A sweep below a pivot low is treated as bullish, while a sweep above a pivot high is treated as bearish. • Pivot Structure — Confirmed swing highs and lows defined by the Pivot Length setting. Consecutive pivots in the same direction are updated when a more extreme high or low forms. • Take-Profit Level — A target created after a valid sweep. For bullish sweeps, the target is the midpoint between the swept low and the latest swing high. For bearish sweeps, it is the midpoint between the swept high and the latest swing low. • Level Expiry — The period during which a liquidity or take-profit level remains active. Levels stop extending after they are reached or after the selected number of bars expires.

• Watch the active liquidity levels around price to identify recent swing highs and lows that price may test. • Look for a ▲ below price when sell-side liquidity is swept. This shows that price moved below a pivot low but the candle body remained above the level. • Look for a ▼ above price when buy-side liquidity is swept. This shows that price moved above a pivot high but the candle body remained below the level. • After a valid sweep, use the dotted take-profit level as the indicator's structure-based target. • Watch for a when price reaches an active target. The connecting dotted line shows which sweep produced the completed target. • Increase Pivot Length to focus on broader swings, or reduce it to detect smaller local swings. • Enable Higher Timeframe mode when you want the liquidity structure and signals to come from a broader timeframe than the current chart. • Adjust Level Expiry Bars to control how long untouched liquidity and take-profit levels remain active.