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Institutional Liquidity and Price Action Concepts

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Key Features

Market Structure Analysis

  • Customizable time-horizon

  • BOS confirmation methods

  • Adjustable CHoCH/BOS line styles

  • Swing point highlighting

  • Color customization

FOMO Bubbles

  • Configurable look-back period

  • Adjustable noise filter factor

  • Customizable bubble colors

Liquidity Heatmap

  • Configurable look-back period

  • Adjustable resolution

  • Customizable scale colors

Trend Lines

  • Look-back period settings

  • Noise filter factor

  • Trend line signals with color options

USAGE EXAMPLES

At its core, the components within ILPAC™ were designed to operate with each other as a form of confluence and robust analysis. Typically, Price action components such as the Market Structure and Trend Lines can be used for entries while the Liquidity components like FOMO Bubbles and the Heatmap can be used to find exit points. Here are some examples of how they can be used.

Trend Trading

Using the Market Structure component, enter a trade during a CHoCH and set TP at key areas of liquidity using the heatmap. Users can also choose to enter into a BOS which is an indication of a trend continuation.

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Reversal Trading

Using the Liquidity Heatmap to find areas of liquidity for possible reversals, wait for a rejection from a liquidity zone and use the Trend Line Breakout signals as confluence for an entry. Exits can be set at liquidity zones or using FOMO Bubbles as take profit signals.

SETTINGS

  • Market Structure Time-Horizon: Controls the time horizon used by the indicator to determine market structure. A larger number looks at longer-term market structure, while a smaller number shows shorter-term market structure.

  • BOS Confirmation Type: Choose whether the candle close/wick above previous swing point counts as a Break of Structure (BOS).

  • CHoCH/BOS Line Style: The line style for marking out the broken swing levels during a Change of Character (CHoCH) or BOS. This is purely aesthetic and does not affect calculations.

  • Heatmap Look-Back: Determines the time horizon the indicator will use to make the Heatmap. A larger number marks longer-term liquidity, while a smaller number gives shorter-term liquidity.

  • Resolution (Heatmap): A higher resolution will give a more detailed gradient but will also take longer to load. Reduce this if the indicator fails to load.

  • Trend Lines Look-Back: The time horizon the indicator will use to detect trend lines. A higher value detects longer-term trend lines.

  • Noise Filter Factor (Trend Lines): Controls the width (buffer zone) of the trend line. A higher value increases the width and prevents more false breakouts, but detects real breakouts slower.

  • FOMO Look-Back: The look-back window to determine if the market is in FOMO. A higher value gives fewer bubbles, and vice versa.

  • Noise Filter Factor (FOMO Bubbles): Controls the sensitivity of FOMO detection. A higher value reduces noise and decreases detection sensitivity.

CONCLUSION

The Institutional Liquidity and Price Action Concepts™ (ILPAC) indicator by AlgoAlpha is a powerful tool for traders, offering in-depth market insights through its Market Structure, Liquidity Heatmap, Trend Lines, and FOMO Bubbles components. By integrating Price Action based analysis with Liquidity analysis, ILPAC™ boasts a superior design for the confluence between its components, using Price Action components for entry opportunities and Liquidity based components for exit opportunities. With its highly customizable settings, this indicator caters to all trading styles, from scalping to long-term investing. By providing clear visualizations and automatic trend and liquidity detection, ILPAC™ empowers traders to make informed decisions, enhancing their trading strategies and improving overall market understanding.

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