Market Memory Zones from Displacement, Structure Shifts, and Liquidity Sweeps

Summary

This article describes a chart indicator that marks price areas associated with strong moves, changes in market structure, and liquidity sweeps. Displacement zones come from unusually large candles with limited overlap against surrounding price action. Structure transition zones mark breaks of prior swing highs or lows, while liquidity sweep origin zones are drawn around candles that take a prior high or low and are followed by a reversal. The proposed rationale is that price may revisit these areas, where traders can watch for reactions.

The implementation uses configurable lookback, ATR-based candle thresholds, optional volume filtering, limits on displayed zones, and visual controls. It stores zone ranges and classifications, and includes logic for identifying whether price is within or has fully traversed a zone. The article explains the indicator’s design but supplies no measured return, hit rate, or validation that these areas are statistically more likely to attract price. Zone definitions and the “memory” interpretation remain hypotheses that traders would need to test across instruments and timeframes.

Key ideas

• The indicator groups marked areas into displacement, unfilled, structure transition, and liquidity sweep origin zones.
• Displacement detection uses expanded candle range and limited overlap as signs of forceful price movement.
• Structure transition zones are associated with breaks of prior swing highs or lows.
• Liquidity sweep origin zones mark the candle that takes a prior extreme before price reverses.
• The document presents no performance study confirming that price reliably returns to these zones.

Tags

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