The **Liquidations** indicator visualizes the forced closure of leveraged Futures positions across top exchanges in real time. It provides vital insights into moments of extreme volatility caused by **Long** and **Short liquidations**, which often signal potential **trend reversals**, **momentum continuations** or **liquidity grabs**.
Liquidations are **forced market orders** triggered when a trader's margin is insufficient to hold a leveraged position. These are **not voluntary trades** — they often cause rapid price movements and **spikes in volume**, which can either fuel a trend or mark its end.
This makes it an essential tool for traders looking to understand the true driver behind price moves and detect **traps**, **fakeouts** and **market maker behavior**.
## Interpreting Liquidations
**New Highs Liquidations**
* If **long positions are liquidated** during a breakout to new highs, it often signals a **fakeout** or exhaustion of bullish momentum.
**New Lows Liquidations**
* **Long liquidations** at fresh lows typically indicate panic selling and can mark **local bottoms**.
Liquidations example
{% hint style="info" %}
Watch for **clusters of liquidations** — large spikes followed by V-shaped reversals often highlight liquidity hunts.
{% endhint %}
## Liquidation settings
There are two types of Liquidations indicator — standard and aggregated.
For the aggregated indicator you can change Size of liquidation (in USD), Overrides, Markets and Exchanges. Also you can change the visual appearance.
Liquidation settings
Liquidations appearance
## Best Practices & Use Cases
* Combine Liquidations with **Open Interest**
Open Interest decreasing + heavy liquidations = **position flush** and potential reversal.
* Use with **Order Book Top Levels**
Watch how price reacts when liquidation spikes collide with strong limit order clusters.\
If **long liquidations** happen right after a price breaks above resistance and then **price returns below**, it can signal a **bull trap** and the start of a **downtrend**.
* Check for **Liquidation Clusters**
Multiple liquidation spikes in a short time frame often precede **trend exhaustion** or **sharp reversals**.
* Confirm with **Volume**
Liquidations without supporting volume often result in **mean reversion**.
Use the liquidations indicator to gain a deeper understanding of the current moment! 🚀
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