Liquidity + Order-Flow Exhaustion (Smart-Money Logic)

Liquidity + Order-Flow Exhaustion (Smart-Money Logic) is a visual tool that helps traders recognize where big market participants (“smart money”) are likely accumulating or distributing positions.
It identifies liquidity sweeps (stop-hunts above or below previous swing levels) and market structure shifts (reversals confirmed by price closing back in the opposite direction).

In simple terms, it shows where price “tricks” retail traders into chasing breakouts — right before reversing.

How it works:

1. The script scans recent highs and lows to find when price breaks them and quickly rejects — a sign of stop-hunts or liquidity grabs.
   
2. It then checks for a close back inside the previous range to confirm a possible Market Structure Shift (MSS).
   
3. When this happens, the chart highlights the zone and optionally adds directional labels (🔹 or 🔸) to mark where the liquidity event occurred.
   

How to read the signals:

1. 🟢 Bullish shift — Price takes out a previous low, then closes higher. This often marks the end of a short-term down-move.
   
2. 🔴 Bearish shift — Price sweeps a previous high, then closes lower. This often marks the end of a short-term rally.
   
3. Colored backgrounds and labels help visualize these key reversals directly on the chart.
   

How to use it:

1. Apply to any timeframe; 15-minute to 4-hour charts work best.
   
2. Use it to confirm reversals near major swing points or liquidity zones.
   
3. Combine with volume spikes, displacement candles, or Fair-Value Gaps (FVGs) for stronger confirmation.
   

What makes it original:

1. Simple, self-contained logic inspired by Smart Money Concepts (SMC).
   
2. Automatically detects both liquidity sweeps and the subsequent structural shift.
   
3. Visual and alert-ready design — perfect for discretionary or algorithmic strategies.
   

Tip: For even better accuracy, align detected shifts with higher-timeframe bias or VWAP deviations.