Pivot Liquidity Zone Breakouts with a Higher-Timeframe Trend Filter

Summary

This strategy builds sloping zones from successive pivot highs and lows, using a volatility-based padding distance to form upper and lower channels. When price moves beyond a zone boundary, it generates a directional signal. The code trades an upper-zone break as a long signal and a lower-zone break as a short signal, subject to an optional higher-timeframe trend filter. That filter checks whether price is above or below a higher-timeframe EMA and whether the EMA is rising or falling; its default settings use a 250-period EMA on a four-hour chart.

Entries receive stop-loss and take-profit levels set as multiples of ATR at the signal, and the script plots the trend line and trade levels. The description frames the zones as liquidity pools and the breaks as sweeps, but the code supplies no independent market evidence for that interpretation. No backtest results are included, and pivot confirmation, parameter choices, execution costs, and instrument differences may affect behavior and results.

Key ideas

• The strategy connects pivot highs and lows to form projected, padded price zones.
• A move beyond the upper zone triggers a long signal, while a break below the lower zone triggers a short signal.
• An optional higher-timeframe EMA and its slope can filter trades by trend direction.
• Stop losses and targets are placed using ATR multiples calculated when a signal occurs.
• The document provides code and a conceptual description but no performance evidence or robustness analysis.

Tags

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