Liquidity Pools Indicator

Friends have you come across this Indicator before, well in case you have not, today, is the day that you will get to know about the indicator which isn't as common as every other indicator. However, it can easily be found in Tradingview.

It is called "Liquidity pool" in the crypto space when the word liquidity is been mentioned it simply means an easy way crypto can be bought or sold quickly without delay. Talking about liquidity Pool Indicator, according to Tradingview script; _{"it is simply a technical analysis price action indicator that shows the areas on a price chart where stop losses are accumulated, in the market by reaching the areas and collecting liquidity (SH), providing the necessary energy to move the price."}

In the chart we have shared we can see areas like Stop Hunt (SH), and Stop loss (SL) level. The majority of traders believe that when the price of an asset falls to the support level, they believe the demand for the asset is high which can outweigh the supply by buying and placing their stop loss below the support level.

In the liquidity pools Indicator, the stop hunt area is important for traders as traders see this area as the point where institutional and large investors can fill in their orders. Although they penetrate the price-blown support level or above the resistance level to touch their stop loss and fill their orders then the price trend of the asset will reverse.

Cash zones are typically located above swing high and under swing low. They can be categorized more specifically as support or resistance levels above triple top patterns and double top, below double bottom, and bullish trends.

In conclusion, the liquidity pools are levels (areas) where smaller traders are more likely to place stop-loss orders to manage their risk from the chart we have so far shared we can see the swing low and swing high areas.

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