Harmonic Liquidity Waves [JOAT]

Harmonic Liquidity Waves [JOAT]

Overview
Harmonic Liquidity Waves is an open-source oscillator indicator that combines multiple volume-based analysis techniques into a unified liquidity flow framework. It integrates VWAP calculations, Chaikin Money Flow (CMF), Money Flow Index (MFI), and Klinger Volume Oscillator (KVO) with custom harmonic wave calculations to provide a comprehensive view of volume dynamics and money flow.

What This Indicator Does
The indicator calculates and displays:

• Liquidity Flow - Volume-weighted price movement accumulated over a lookback period
  
• Harmonic Wave - Multi-depth smoothed oscillator derived from liquidity flow
  
• Chaikin Money Flow (CMF) - Classic accumulation/distribution indicator
  
• Money Flow Index (MFI) - Volume-weighted RSI showing buying/selling pressure
  
• Klinger Volume Oscillator (KVO) - Trend-volume relationship indicator
  
• Wave Interference - Combined constructive/destructive wave patterns
  
• Volume Profile POC - Point of Control from simplified volume distribution
  

How It Works

The core liquidity flow calculation tracks volume-weighted price changes:

calculateLiquidityFlow(series float vol, series float price, simple int period) =>
    float priceChange = ta.change(price)
    float volumeFlow = vol * math.sign(priceChange)
    // Accumulated over period using buffer array
    float avgFlow = flowSum / period
    avgFlow

The harmonic oscillator applies multi-depth smoothing:

harmonicOscillator(series float flow, simple int depth, simple int period) =>
    float harmonic = 0.0
    for i = 1 to depth
        float wave = ta.ema(flow, period * i) / i
        harmonic += wave
    harmonic / depth

CMF measures accumulation/distribution using the Money Flow Multiplier:

float mfm = ((close - low) - (high - close)) / (high - low)
float mfv = mfm * vol
float cmf = ta.sum(mfv, period) / ta.sum(vol, period) * 100

Signal Generation
Liquidity shift signals occur when:

• Bullish Shift: Smoothed wave crosses above signal line
  
• Bearish Shift: Smoothed wave crosses below signal line
  

Strong signals require volume indicator confirmation:

• Strong Bull: Bullish shift + CMF > 0 + MFI > 50 + KVO > 0
  
• Strong Bear: Bearish shift + CMF < 0 + MFI < 50 + KVO < 0
  

Divergence detection compares price pivots with liquidity wave pivots to identify potential reversals.

Dashboard Panel (Bottom-Right)

• Wave Strength - Normalized wave magnitude
  
• Volume Pressure - Current volume vs average percentage
  
• Flow Direction - BUYING or SELLING based on wave sign
  
• Histogram - Wave minus signal line value
  
• CMF - Chaikin Money Flow reading
  
• MFI - Money Flow Index value (0-100)
  
• KVO - Klinger oscillator value
  
• Vol Confluence - Combined volume indicator score
  
• Signal - Current actionable status
  

Visual Elements

• Liquidity Wave - Main oscillator line
  
• Wave Signal - Smoothed signal line for crossover detection
  
• Wave Histogram - Difference between wave and signal
  
• Wave Interference - Area plot showing combined wave patterns
  
• CMF/KVO/MFI Lines - Individual volume indicator plots
  
• Divergence Labels - BULL DIV / BEAR DIV markers
  
• Shift Markers - Triangles for basic shifts, labels for strong shifts
  

Input Parameters

• Wave Period (default: 21) - Base period for liquidity calculations
  
• Volume Weight (default: 1.5) - Multiplier for volume emphasis
  
• Harmonic Depth (default: 3) - Number of smoothing layers
  
• Smoothing (default: 3) - Final wave smoothing period
  

Suggested Use Cases

• Identify accumulation/distribution phases using CMF and wave direction
  
• Confirm momentum with MFI overbought/oversold readings
  
• Watch for divergences between price and liquidity flow
  
• Use strong signals when multiple volume indicators align
  

Timeframe Recommendations
Best on 15m to Daily charts. Volume-based indicators require sufficient trading activity for meaningful readings.

Limitations

• Volume data quality varies by exchange and instrument
  
• Divergence detection uses pivot-based lookback and may lag
  
• Volume Profile POC is simplified and not a full profile analysis
  

Open-Source and Disclaimer
This script is published as open-source under the Mozilla Public License 2.0 for educational purposes. It does not constitute financial advice. Past performance does not guarantee future results. Always use proper risk management.

- Made with passion by officialjackofalltrades