Liquidity Sweeps and Displacement for SMC Entries

Summary

This strategy combines market structure breaks, liquidity sweeps, order blocks, and fair value gaps to identify potential reversal entries. It tracks multiple prior swing highs and lows as liquidity pools; a sweep occurs when price trades beyond a pool and closes back across it. A qualifying sweep arms a setup, which requires a break of structure in the opposite direction. The code can filter breaks for a large directional candle and optionally require alignment with a higher timeframe moving average or a fair value gap.

After confirmation, the described system can use an order block retest and additional candle confirmation before entry. It includes configurable stop methods, profit targets based on risk multiples or nearby liquidity, risk-based sizing, and a breakeven stop option. These are configurable rules in an open-source strategy, not evidence of profitability: the supplied excerpt omits much of the entry and exit implementation and gives no backtest results. Pivot-based structure signals also become available only after subsequent bars confirm the pivot, and outcomes will depend on market, timeframe, settings, and execution costs.

Key ideas

• The script tracks several prior swing levels as liquidity pools and removes them after a sweep or age limit.
• A sweep arms a potential reversal that must be followed by a break of structure within a configurable window.
• Displacement, higher timeframe trend, fair value gap, order block retest, and candle confirmation can filter setups.
• Stops, targets, breakeven behavior, and risk-based position sizing are configurable.
• The excerpt does not provide full trade logic or performance evidence, so the rules alone do not establish an edge.

Tags

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