Equal highs and lows are often discussed as if every nearby swing marks a separate level. On a busy chart that creates a stack of almost-identical lines. Liquidity Map & Order Blocks takes a different approach: it groups nearby confirmed pivots into ATR-normalized pools and grades the pool rather than treating every swing as an isolated claim.
Clustering happens before scoring
The Pine source collects confirmed pivot highs and lows inside the configured lookback, sorts them by price and merges nearby observations when their separation falls inside Cluster Eps (ATR). A pool must also meet Min Touches. This makes the grouping relative to the instrument’s current volatility rather than a fixed number of points.
The resulting band has a center, a thickness, a birth bar, a touch count and a side. Min Band Height (ATR) provides a visual floor so a dense pool remains readable as a band instead of collapsing into a hairline.
Brightness summarizes several ingredients
The liquidity score combines touch accumulation, age decay, optional volume context and rejection-wick context. Recent, repeatedly observed pools can therefore render more prominently than older or thinner ones. If Use Volume in Score is disabled, the volume component becomes neutral rather than silently using unavailable data.
This is a ranking inside the overlay, not evidence that price must visit the brightest band. The score describes why one pool is emphasized relative to another under the current settings.
Sweeps change a pool's lifecycle
A high-side sweep requires price to penetrate beyond the latest significant high by the configured ATR fraction and close back below it; the low-side rule is mirrored. The logic runs on confirmed bars. Once a sweep associated with a pool is recorded, the band is rendered as swept context rather than left visually identical to an untouched pool.
The conceptual difference between the excursion and its aftermath is covered in What Happens After a Liquidity Sweep.
Order blocks and gaps are structure-gated
The script searches for the last opposite candle only when a confirmed break-of-structure event occurs. Fair Value Gaps are also created only when their three-candle imbalance aligns with such an event, and their display is optional. Mitigated blocks and filled gaps fade instead of remaining visually current.
That gate is why a candle that resembles an order block by shape alone may not appear. The overlay requires the structural event, not only the candle pattern. See our structural invalidation guide for the terminology.
Settings verified in source
The source exposes lookback, cluster distance, minimum touches, age half-life and the volume toggle for pool construction; proximity, structural prior, path clearance and calibration controls for the draw model; sweep penetration and structure labels; order-block/FVG toggles and scan limits; visual colors/band height; and three HUD timeframes. The exact controls are documented in the live LMOB product guide.
Honest limitation
A density band is a structured summary of confirmed pivots under chosen settings. It does not reveal actual resting orders, and a relative score does not guarantee a future visit or reaction. Use the map to make level selection explicit, not to replace independent risk analysis.