Ever looked at your chart and wondered if there was a way to actually catch those insane liquidation reversals before the market snaps back.
This whole breakdown is made just for you. We are talking about the AlgoAlpha Liquidation Reversal Stats script. A Pine Script tool built to help you spot liquidation spikes. confirm trend flips. simulate trades. display stats. and honestly just make your Trading workflow smoother without feeling like you are crunching rocket science equations.
This thing mixes volume. z score spikes. supertrend direction. plus auto calculated take profit and stop loss levels.
So yeah. if you ever wanted to feel like your chart is doing half the workload for you. keep reading. This is going to be a long detailed guide. built for people who want to use Trading to actually get an edge. and not just stare at candles all night.
What You Are Getting Out Of This Guide
Here are the main points I am breaking down for you in this deep article.
You get a clean understanding of how liquidation detection really works
You understand how z score thresholds trigger reversal signals
You get how the script catches trend flips using supertrend logic
You see how auto TP and SL are calculated with ATR logic
You understand how the built in trade simulation works inside the script
You get a feel for the stats table that shows total trades wins losses and win rate
You learn why this tool matters for Trading and how you can use it for your own setups
Everything here is written to help you use this indicator right away.
H Two. What Exactly Is The AlgoAlpha Liquidation Reversal Stats Tool
So picture this for a sec. You are watching the market. sudden liquidation candles are smashing up and down. you have no idea if this is a real reversal or just the market faking everyone out again.
This script takes in up and down volume from a lower timeframe that you choose. then it studies the average behavior of that volume over a long lookback range. After that it checks how extreme the most recent volume spike is compared to what is normal.
That extremity is measured using a z score.
A high z score means volume is going crazy compared to normal. aka liquidation city. This is the moment where big players get squeezed. orders get forced out. and price whips.
Now. instead of guessing. this script looks for those exact moments and marks them for you.
But it does not stop there.
It waits to see if the supertrend flips within a short time window after that liquidation spike.
If it does. boom. you got a reversal signal.
If it does not. the spike is ignored.
That is honestly one of the smart parts of the system.
H Two. How Liquidation Detection Works
The core of this script uses requested up volume and down volume from a lower timeframe. But to avoid false signals. the script does some filtering.
Here is a simple version of the logic in plain English.
Up volume spike above a z threshold plus bearish supertrend means short side liquidations which may reverse upward.
Down volume spike above a z threshold plus bullish supertrend means long side liquidations which may reverse downward.
That simple logic already helps you stay away from garbage noise.
H Two. Z Score. Explained Without The Math Headache
A z score is basically your chart telling you. hey. this volume right here is way higher than normal.
The script calculates the average up volume or down volume over a long range. Then it calculates the standard deviation which is just a fancy way of saying how much the volume usually swings around the average.
A z score checks how far the new volume spike is away from that average.
The script lets you set the threshold. For example. a threshold of three means the spike needs to be really insane. way beyond normal behavior.
Again. no math degree needed for this. The script handles all the numbers under the hood. You just adjust the threshold and watch the magic happen.
H Two. Trend Flip Detection With Supertrend
Liquidation spikes alone are noisy. That is why this script waits for confirmation.
It tracks the supertrend direction.
Then it checks if the direction flips within a certain number of bars after the liquidation spike.
If it does. you get a valid reversal.
If not. the signal is ignored and forgotten.
This timing logic is important. It prevents your chart from firing off random dots everywhere.
H Two. The Trade Simulation Feature
Now this part is honestly sick. The script does not only show signals. It automates a mini backtest right on the chart.
Here is what it simulates.
Entry on each valid reversal signal
Stop loss using ATR times a multiplier
Take profit using ATR times a bigger multiplier
Tracks wins and losses
Updates totals live
This way you do not need to open the Strategy Tester. You get a clean stats table right there.
H Two. Breakdown of the Stats Table
At the corner of your chart. you get a live table that updates every fresh bar.
Below is a simple example of how the stats table might look.
Stats Table Example
| Statistic | Value |
|---|---|
| Total trades | about ten or however many the script counts |
| Wins | example five |
| Losses | example five |
| Win rate | about fifty percent depending on your settings |
This table helps you judge if your settings are actually working or if you need to tweak your stop loss or take profit multipliers.
H Two. Visual Markers And Colors
The script does not leave you hanging. It gives visual cues everywhere.
Here is what you get.
Colored candles based on reversal direction
Up triangles marking buy signals
Down triangles marking sell signals
Colored dots marking where liquidations happened
TP and SL lines drawn automatically
GHOST watermark in the center if you want it on
Charts feel alive with this script.
H Two. Why This Tool Actually Matters For Trading
Liquidations run the crypto markets.
Large positions get flushed out.
Big wicks appear.
Price rips the other way.
Catching liquidation reversals is one of the strongest edges you can have in Trading.
This script helps you.
Remove emotions
Spot extreme volume shifts
Wait for real confirmation
Automate entries and exits
Track performance with zero effort
It gives you structure.
And structure in Trading is priceless.
H Two. How You Can Use This In Your Own Trading
Here are simple ways you can blend this indicator into your Trading flow.
Use it as a confirmation tool along your main strategy
Use the liquidation spikes to time entries near extreme conditions
Use the stats table to tune your risk settings
Use the TP and SL logic to keep your trades consistent
You can run it on crypto. forex. indices. anything with volume.
H Two. Example Workflow You Can Try
Here is a clean flow you can test out.
Pick a lower timeframe for volume such as fifteen minute
Set your z threshold up or down based on how strict you want detection to be
Turn on TP and SL lines
Watch for liquidation spikes
Wait for the supertrend flip
Let the script simulate the trade entries and show how profitable the logic is
Pretty simple. extremely powerful.
H Two. Frequently Asked Questions
Does this script repaint.
Signals appear only after confirmation. It does not repaint past data.
Can I use this with other indicators.
Yeah absolutely. You can blend support and resistance. order flow. or even classic price action.
Is this a financial guarantee.
No. It is just a tool. Trading always carries risk.
Does the stats table reset.
It resets when you refresh or switch charts.
Can this be used on crypto only.
Nope. It works on anything with volume data.
H Two. Source Links
Here are relevant sources mentioned throughout the article.
TradingView Pine Script Reference.
https colon slash slash www dot tradingview dot com slash pine script docs
Mozilla Public License.
https colon slash slash mozilla dot org slash MPL slash two dot zero
These links help you see more about scripting rules and how indicators are licensed.
Citations
Reference A. TradingView Documentation. Accessed recently.
Reference B. Mozilla Licensing Notes. Accessed recently.
H Two. Contact Us Via The Web
If you want help. upgrades. or custom indicator builds. you can reach us through the web anytime.
Conclusion
By now you got a full picture of how the AlgoAlpha Liquidation Reversal Stats tool works. You understand the liquidation detection logic. the z score spike filtering. the supertrend confirmation. the auto TP and SL settings. and that slick stats table that tells you exactly how your decisions are playing out.
This indicator gives you a real chance to use Trading with structure. confidence. and data. And when you trade with structure you stop guessing. you stop overthinking. you stop getting caught in fake pumps.
Use this tool to sharpen your entries. avoid emotional decisions. catch extreme reversals. and learn more about market behavior in a way that feels natural.