Liquidity Price Depth Chart [LuxAlgo]

14 Nov 2023

The Liquidity Price Depth Chart is a unique indicator inspired by the visual representation of order book depth charts, highlighting sorted prices from bullish and bearish candles located on the chart's visible range, as well as their degree of liquidity.

Note that changing the chart's visible range will recalculate the indicator.

🔶 USAGE

The indicator can be used to visualize sorted bullish/bearish prices (in descending order), with bullish prices being highlighted on the left side of the chart, and bearish prices on the right. Prices are highlighted by dots, and connected by a line.



The displacement of a line relative to the x-axis is an indicator of liquidity, with a higher displacement highlighting prices with more volume.



These can also be easily identified by only keeping the dots, visible voids can be indicative of a price associated with significant volume or of a large price movement if the displacement is more visible for the price axis. These areas could play a key role in future trends.



Additionally, the location of the bullish/bearish prices with the highest volume is highlighted with dotted lines, with the returned horizontal lines being useful as potential support/resistances.

🔹Liquidity Clusters



Clusters of liquidity can be spotted when the Liquidity Price Depth Chart exhibits more rectangular shapes rather than "V" shapes.

The steepest segments of the shape represent periods of non-stationarity/high volatility, while zones with clustered prices highlight zones of potential liquidity clusters, that is zones where traders accumulate positions.

🔹Liquidity Sentiment



At the bottom of each area, a percentage can be visible. This percentage aims to indicate if the traded volume is more often associated with bullish or bearish price variations.

In the chart above we can see that bullish price variations make 63.89% of the total volume in the range visible range.

🔶 SETTINGS

🔹Bullish Elements

• Bullish Price Highest Volume Location: Shows the location of the bullish price variation with the highest associated volume using one horizontal and one vertical line.
  
• Bullish Volume %: Displays the bullish volume percentage at the bottom of the depth chart.
  

🔹Bearish Elements

• Bearish Price Highest Volume Location: Shows the location of the bearish price variation with the highest associated volume using one horizontal and one vertical line.
  
• Bearish Volume %: Displays the bearish volume percentage at the bottom of the depth chart.
  

🔹Misc

• Volume % Box Padding: Width of the volume % boxes at the bottom of the Liquidity Price Depth Chart as a percentage of the chart visible range