POC Sweep Reclaim [LuxAlgo]The POC Sweep Reclaim (PSR) model identifies a two-step "rejection then acceptance" price action pattern centered around the Point of Control (POC) of previous candles. By approximating volume-at-price data using lower timeframe (LTF) granularity, the tool highlights specific liquidity traps where price first fails to sustain a move beyond a high-volume level and subsequently reclaims it.
The PSR framework is built on the logic that a "Sweep" represents a failed probe of value, while the "Reclaim" represents a successful breach, signaling a potential shift in market dominance as price moves away from trapped participants.
🔶 USAGE
The indicator visualizes market microstructure dynamics through a sequence of two distinct events:
🔹 The Sweep (The Rejection)
A sweep occurs when a candle's wick trades through the previous bar's POC, but the candle body fails to close beyond it. This identifies a "Liquidity Grab" where price interacts with a high-volume node but fails to find acceptance, often trapping breakout traders.
Buyside Sweep: Price wicks above the previous POC but closes below it (Bearish Rejection). Sellside Sweep: Price wicks below the previous POC but closes above it (Bullish Rejection).
🔹 The Reclaim (The Acceptance)
A reclaim occurs when the candle immediately following a sweep successfully closes beyond the same POC level that was just rejected.
BSR (Buyside Reclaim): A bullish signal where price closes above a previously swept upper POC, suggesting the trap is resolved to the upside. SSR (Sellside Reclaim): A bearish signal where price closes below a previously swept lower POC, suggesting follow-through to the downside.
🔶 DETAILS
The script aims to bridge the gap between standard OHLCV analysis and order-flow dynamics. While a true footprint engine (available on higher TradingView tiers) is more accurate, this script uses a proxy by aggregating volume from a lower timeframe (e.g., 1-minute) to estimate the POC of higher-timeframe bars.
🔹 Academic Intuition
Order-Flow Imbalance (OFI): Short-term price changes are strongly linked to the inability of one side to provide enough depth. A "reclaim" reflects a shift where the dominant side successfully absorbs the liquidity that caused the initial rejection. Salient Prices: High-volume nodes like the POC act as psychological and mechanical barriers. Research indicates that liquidity clusters around these prominent prices, making them significant areas for support/resistance. Stop-Loss Cascades: Sweeps often interact with clustered stop-loss orders. If price reclaims the level after clearing these stops, it can trigger a directional move as the market "clears" the liquidity hurdle.
🔹 Practical Limitations
Footprint Proxy: The POC is calculated by aggregating volume at the close of LTF bars. This is a noisy proxy compared to a true footprint, which tracks every tick. Data Snooping: Like all pattern-based indicators, the "Reclaim" logic should be verified with robust backtesting to ensure signals are not the result of random price noise. Repainting: Because the POC depends on LTF data, the values for the current developing bar may fluctuate until the candle closes.
🔶 SETTINGS
Lower Timeframe for POC: Sets the granularity for volume aggregation. A lower value (like 1m) provides a more precise POC proxy. Show POC: Toggles the visibility of the calculated Point of Control dots for every bar. Show Sweep Dots: Displays markers at the POC level when a wick interaction occurs without a body close. Show BSR (Buyside Reclaim): Highlights candles that successfully close above a swept buyside POC. Show SSR (Sellside Reclaim): Highlights candles that successfully close below a swept sellside POC.
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