Detecting Session-Range Liquidity Sweeps and Reversals

Summary

The indicator tracks a session’s developing high and low, freezes those levels when the session ends, and monitors subsequent price action for a sweep. A breach must exceed a configurable buffer; the signal is confirmed only if price closes back inside the level within a limited number of bars. A breach that does not reverse in time is treated as a breakout rather than a reversal. The method is presented for intraday charts, especially M5 to M30, with major FX pairs as examples.

A bullish signal follows a sweep below the session low and a close back above it; a bearish signal follows a sweep above the high and a close back below. The document recommends using arrows as prompts for additional price-action confirmation, with the opposite range boundary as a possible initial target. Suggested settings include session hours, a two-point buffer, and a two-bar reversal window. The explanation is conceptual and includes a described EURUSD chart, but supplies no backtest, signal statistics, or evidence that the approach generalizes across instruments or session definitions.

Key ideas

• The detector records a session high and low, then extends those levels after the session closes.
• A sweep requires a buffered move beyond a level followed by a close back inside within the allowed bars.
• A delayed or absent return inside the range is treated as a breakout and produces no reversal signal.
• Signals indicate possible reversals and are intended to be checked with additional price-action evidence.
• The document gives example settings but no quantified test results.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.