Adaptive Liquidity Pool (ALP)
2025-02-11
Category: None

working on this idea - now a days 

 Core Features of Adaptive Liquidity Pulse Indicator 
	1.	Real-Time Liquidity Zone Detection
	•	Identifies high-liquidity areas where large orders are likely placed.
	•	Uses a rolling lookback mechanism to detect historical liquidity pools.
	•	Adjusts dynamically as price action evolves.
	2.	Absorption vs. Rejection Mechanism
	•	Absorption (Green Zones): When price touches a liquidity zone but fails to break through, it indicates strong buying or selling absorption.
	•	Rejection (Red Zones): If price attempts to break through liquidity zones but immediately pulls back, it signals rejection by liquidity providers.
	3.	EMA-Style Dynamic Liquidity Zones
	•	Instead of fixed support/resistance levels, EMA smoothing is applied to liquidity bands.
	•	These bands help traders visualize how liquidity is shifting dynamically.
	4.	Volume Confirmation Filter
	•	Only highlights liquidity zones where volume spikes occur.
	•	Prevents false signals from appearing in low-volume conditions.
	5.	Zone Strength Differentiation
	•	Strong Zones (Deep Colors): More significant liquidity pools with higher interaction.
	•	Weak Zones (Lighter Colors): Less impactful but still notable areas.
	6.	Alerts & Labels for Actionable Signals
	•	Generates “Rejection” and “Absorption” alerts when price interacts with these zones.
	•	Labels provide a quick visual cue for traders.
	7.	Potential Trading Use Cases
	•	Trend Reversals: If price repeatedly rejects liquidity zones, it signals a potential reversal.
	•	Breakout Confirmation: Price cleanly breaking through a strong zone with volume suggests a high-probability breakout.
	•	Support & Resistance Validation: Adaptive liquidity zones act as dynamic S/R areas.