Market Structure HighLow + Liquidity [MaB]

📊 Market Structure HighLow + Liquidity [MaB]
A comprehensive indicator combining precision market structure analysis with real-time liquidity zone detection.
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🔬 HOW THE ALGORITHM WORKS
1. Swing Point Detection Logic
Unlike simple pivot-based indicators, this script uses a custom state machine that tracks price action in real-time:
Candidate Detection: When price makes a new high, the algorithm waits for a candle to CLOSE below the low of that high candle. This "close below trigger" initiates a candidate state.
Dual Confirmation System: A candidate becomes a validated swing point only when BOTH conditions are met:

Time Filter: A minimum number of candles must pass (configurable, default: 5)
Price Filter: Price must retrace by a minimum percentage of the previous leg's range (configurable, default: 10%)

Dynamic Threshold Adjustment: When the current leg amplitude exceeds 2.5× the average of the last 20 legs, the algorithm automatically relaxes confirmation filters to avoid missing extended moves.
2. Trend State Machine
The indicator maintains an internal trend state (Uptrend/Downtrend) that determines how price action is interpreted:
Uptrend Mode: Searches for Higher Highs and Higher Lows. A confirmed High triggers monitoring for breakout above that level.
Downtrend Mode: Searches for Lower Highs and Lower Lows. A confirmed Low triggers monitoring for breakdown below that level.
Trend Inversion: When price closes beyond the opposite structure point by the Breakout Threshold %, the trend state flips and the search pattern reverses.
3. FVG (Fair Value Gap) Detection
The algorithm scans for 3-candle patterns where a gap exists between candle 1's high/low and candle 3's low/high:
Bullish FVG: low[0] > high[2] AND close[1] > high[2] — gap above, indicating buying pressure
Bearish FVG: high[0] < low[2] AND close[1] < low[2] — gap below, indicating selling pressure
4. Imbalance vs Inducement Classification
This is the key innovation of this indicator:
Inducement Zone: An FVG detected BEFORE the next structural breakout is confirmed. These often act as liquidity traps where stops are hunted before the real move.
Imbalance Zone: An FVG that survives until breakout confirmation. When price breaks structure, the last active Inducement converts to an Imbalance, signaling a validated supply/demand zone.
Detection Flow:
High Confirmed → Start scanning for FVGs → Each FVG = Inducement
↓
Breakout Confirmed → Last Inducement → Imbalance
5. Zone Touch Detection
Zones are monitored each bar. A zone is considered "touched" when:
Supply Zone: high >= zone_bottom + (zone_height × retracement%)
Demand Zone: low <= zone_top - (zone_height × retracement%)
At 0% retracement, first contact closes the zone. At 100%, price must fully traverse it.
6. Zone Size Filter
To avoid noise from insignificant zones, the algorithm maintains a rolling average of the last 50 zone heights:

Zones smaller than (100% - tolerance%) of the average are rejected
With default 85% tolerance: zones below 15% of average size are filtered out
Large zones are always accepted regardless of size

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⚙️ PARAMETERS EXPLAINED
Market Structure

Min Confirmation Candles (default: 5) — Bars required after candidate detection
Pullback Percentage (default: 10%) — Minimum retracement of leg range
Breakout Threshold (default: 1%) — Distance beyond structure for confirmed break

Liquidity

Zone Size Tolerance (default: 85%) — Filters zones smaller than 15% of average size
Min Zones for Average (default: 10) — Zones needed before size filter activates
Zone Retracement (default: 0%) — How deep price must enter to invalidate zone

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🎨 VISUAL GUIDE
Structure Lines:
🟢 Green = Uptrend leg (L→H in uptrend)
🔴 Red = Downtrend leg (H→L in downtrend)
⚪ Gray = Trend inversion point
Zone Colors:
🔴 Red = Imbalance Supply (validated resistance)
🟢 Green = Imbalance Demand (validated support)
🟠 Orange = Inducement Supply (potential bull trap)
🔵 Blue = Inducement Demand (potential bear trap)
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💡 PRACTICAL USAGE

Trend Following: Trade in direction of colored lines (green = long bias, red = short bias)
Zone Entries: Look for price returning to Imbalance zones for high-probability entries
Trap Avoidance: Inducement zones warn of potential stop-hunts before real moves
Breakout Confirmation: Wait for "Br↑" or "Br↓" labels before entering breakout trades

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⚠️ NOTES

Best on 1H+ timeframes for cleaner structure
Inducements often convert to Imbalances after breakout
Use Replay Mode when backtesting to prevent buffer errors
Faded zones show historical levels that have been touched