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Liquidity Sentiment

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This indicator provides insights into trader's buying and selling sentiment. It is not directly related to traditional momentum indicators, thereby adding value in decision-making. This may allow traders to better predict price movement for more strategic entry and exit points.


What does the Indicator show?

A drop of Liquidity Sentiment suggests more traders are willing to pay the Ask, as they are keen to buy. (In this situation, the indicator moves towards the Ask label).

A rising Liquidity Sentiment suggests more traders are eager to sell, and willing to accept the Bid. (In this situation, the indicator moves towards the Bid label).


Logic:

Why does a stock go up?
Because more traders want to buy than sell, creating illiquidity.
Why does a stock go down?
Because more traders want to sell than buy, creating liquidity.


How to use the Indicators settings?

Setting your chart to 5-minute time periods is best for observing intraday price movements.
Setting your chart to 4-hour time periods provides the best longer term view.

Setting the "Indicator - # of SMA Intervals" to a higher number extends the reading frame of the indicator, this depicts sentiment over the specified time period. For example, if the chart is set to 1 day, and the "Indicator - # of SMA Intervals" is set to 5, the indicator shows the Liquidity Sentiment through a simple moving average of 5 days.


What is a Simple Moving Average?

In stock trading, a Simple Moving Average (SMA) is a calculation that takes the arithmetic mean of a given set of data values over a specified number of time periods, to smooth out data and identify trends.
Informacje o Wersji
Shading background by New York day/night time. Making rhythmic daily and nightly patterns much more obvious.
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Taking labels off axis to make it more useable on mobile
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fixing normalisation error on my part

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