Liquidity Sweep Indicator

Detect four types of liquidity sweeps across all asset classes with this indicator. Identify exhaustion, absorption, rejection, and delta divergence sweeps to p

Published · Updated · Methodology: Technical Indicators

Part of: Liquidity Sweeps & Grabs

  • Methodology: Technical Indicators
  • Content type: indicator
  • Markets: All asset classes

Indicators used

  • Liquidity Sweep Indicator

Source video

Decoded from: This NEW Liquidity Sweep Indicator Is Actually Genius by LuxAlgo — watch the original

Key timestamps:

  • 0:00 - Introduction to the indicator
  • 0:20 - Problem with existing liquidity sweep detection
  • 0:35 - Four types of liquidity sweeps explained
  • 0:40 - Exhaustion (dry sweep)
  • 0:50 - Absorption at extreme
  • 1:10 - Rejection (snap back) sweep
  • 1:20 - Delta divergence
  • 1:40 - Decay system explanation
  • 2:10 - Dashboard for sweep performance
  • 2:25 - Alerts feature coming soon
  • 2:35 - How to access the indicator

Strategy overview

A liquidity sweep is the move that runs price through an obvious high or low, clearing the stop orders resting there before the market decides what to do next. Most material on the subject stops at that definition. This LuxAlgo video starts where it ends: it opens by framing a problem with existing liquidity sweep detection — that treating every raid on a level as the same event collapses very different outcomes into a single signal.

Its answer is a taxonomy. The video sorts sweeps into four categories and walks through them in its opening minute — an exhaustion or 'dry' sweep, where the push through the level arrives with nothing behind it; absorption at the extreme, where the run into the level is met by size willing to take the other side; and a rejection or snap-back sweep, where price is returned inside the range almost as fast as it left. What separates these is not the trigger but the aftermath: the level is taken in all of them, and the classification depends on how the market behaves in the moments that follow.

Two things are worth holding onto when reading this entry. The first is that it documents a tool rather than a trade plan — a classifier suggests which kind of sweep you are probably looking at and leaves entries, invalidation and position sizing to whatever method it is attached to. The second is that no rule set was extracted for this page, and the 'Actually Genius' in the title is the video's own claim, not a verdict; the categories are best judged against your own charts and markets before they earn a place in a process.

Topics

liquidity sweep indicator · tradingview strategy · pine script · trading strategy · price action · all asset classes strategy · market structure · technical analysis · liquidity trading · indicator review · swing trading

Frequently asked questions

What is a liquidity sweep?

A liquidity sweep is a move that pushes price through a visible high or low where stop orders accumulate, triggering them before price either continues or turns back. The level itself is what attracts the move, because it is where resting orders can be filled.

Why would you classify liquidity sweeps into different types?

Because a swept level can be followed by very different outcomes — continuation, an immediate snap back inside the range, or a stall where larger orders absorb the push. Naming those cases separately, as this video does with exhaustion, absorption and rejection sweeps, is an attempt to stop one label from covering unrelated behaviours.

Is this a trading strategy or an indicator?

It is an indicator concept: the video presents a detection tool that labels sweeps as they form, not a complete method with entries and exits. Any tool of this kind still needs an entry model, a stop placement rule and a risk framework layered on top of it.

How can I check whether a liquidity sweep signal is useful for me?

Test it on the markets and timeframes you actually trade, on historical data first, and look at what happens after each type of sweep rather than at the detection alone. Strategy Decoder catalogs strategies and tools presented in video sources so you can evaluate the underlying concept before adopting it.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

Strategy Decoder catalogs 2,229 decoded strategies. Each one is extracted with confidence scoring, cross-linked to the indicators it uses, and kept up to date as new videos are processed daily. Load this page with JavaScript enabled to use the interactive tools, or start from the strategy explorer to filter by methodology, market and timeframe.

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