AI Smart Liquidity Signal Gold SMCver1 🚀

AI Smart Liquidity Signal Gold
Description:
This indicator is a comprehensive technical analysis tool designed to identify potential trading opportunities. It combines two core methodologies: a primary signal engine based on pivot trendline breakouts, and a sophisticated confirmation layer using classic technical indicators. Additionally, it includes a separate module for plotting ICT-based market structure for discretionary analysis. This document provides a detailed, transparent explanation of all underlying logic and calculations.
1. Core Engine: Pivot-Based Liquidity Trendline Signals
The indicator's foundational signal is generated from a custom method we call "Liquidity Trendlines," which aims to identify potential shifts in momentum.
How It Works:
The script first identifies significant swing points in the price using the ta.pivothigh() and ta.pivotlow() functions.
It then draws a trendline connecting consecutive pivot points (e.g., two pivot highs).
A "Liquidity Breakout" signal (liquidity_plup for buy, liquidity_pldn for sell) is generated when the price closes decisively across this trendline, forming the basis for a potential trade.
2. The Signal Confirmation Process: A Multi-Layered Filtering System
A raw Liquidity Breakout signal is only a starting point. To enhance reliability and reduce false positives, the signal must pass through a series of user-enabled filters. A final Buy or Sell signal is only plotted on the chart if all active filter conditions are met simultaneously.
General & Smart Trend Filters: These filters use a combination of moving averages (50, 100, 200 EMA), DMI (ADX), and market structure (higher highs/lower lows) to define the short-term and long-term trend. A signal must align with the calculated trend direction to be valid.
RSI & MACD Filters: These are used for momentum confirmation. For example, a buy signal can be configured to be valid only if the MACD line is above its signal line and the RSI is below a certain threshold.
ATR (Volatility) Filter: Ensures trades are considered only when market volatility is sufficient, calculated as the ATR value relative to the closing price.
Support & Resistance (S&R) Filter: Blocks buy signals forming too close to a resistance zone and sell signals near a support zone.
Higher Timeframe (HTF) Filter: Provides confluence by checking that the trend on higher timeframes (e.g., 1H, 4H) aligns with the signal on the current timeframe.
3. ICT-Based Structure & Premium/Discount Zones (Visual Aid)
Separate from the automated signal filtering system, the indicator also includes a module for plotting key ICT (Inner Circle Trader) concepts. This part of the script is for visual and discretionary analysis only and does not directly influence the Buy/Sell signals.
ICT Market Structure: It plots labels for Change of Character (CHoCH), Shift in Market Structure (SMS), and Break of Market Structure (BMS). This is based on a Donchian-channel-like logic that tracks the highest and lowest price over a user-defined period (ict_prd) to identify structural shifts.
ICT Premium & Discount Zones: When enabled, it draws colored zones on the chart corresponding to Premium (for selling), Discount (for buying), and Equilibrium levels. These are calculated based on the range between the highest high and lowest low over the defined ICT period.
4. Risk Management & Additional Features
TP/SL Calculations: Automatically calculates Take Profit (TP) and Stop Loss (SL) levels for every valid signal based on the Average True Range (ATR).
Multi-Timeframe (MTF) Scanner: A dashboard that monitors and displays the final Buy/Sell signal status across multiple timeframes.
Session Filter & Alerts: Allows for restricting trades to specific market sessions and configuring alerts for any valid signal.
By combining pivot-based breakout detection with a rigorous confirmation process, this indicator provides a structured and transparent approach to identifying trading opportunities.