Time Based Thermal Support and Resistance V0

The Time Based Thermal Support and Resistance V0 indicator analyzes price distribution within a user-defined time window to identify high-density liquidity zones as dynamic support and resistance levels. By calculating the frequency of price action across ten horizontal bands, it visualizes market interest through a thermal gradient, helping traders identify where the asset has spent the most time.

Usage

The Usage section focuses on how to interpret the thermal bands to make informed trading decisions.

• Identifying High-Value Areas: Darker, more opaque bands represent "hotter" zones where price has historically consolidated or clustered. These areas often act as significant support or resistance.
• Trend Boundaries: The overall height of the thermal map is determined by the highest high and lowest low since the user-defined start time. Breakouts above the top band or breakdowns below the bottom band indicate price moving into new territory.
• Volume Profile Alternative: This tool serves as a time-based alternative to a standard Volume Profile, highlighting price levels of high significance based on time duration rather than traded volume.

Details

The script functions by initializing a calculation at a specific timestamp. Once the start time is reached, it tracks the absolute high and low of the session to establish a range. This range is divided into ten equal segments (deciles).

The indicator then calculates the "frequency" of price within each segment. It loops through the historical bars within the active window and determines how often the source price falls within each of the ten bands. A gradient function then maps this frequency to a color transparency, where higher frequency results in a more solid color, creating the "thermal" effect.

Settings

• Year/Month/Day/Hour/Minute: Sets the specific starting point for the thermal analysis.
• Source: The price input used to calculate frequency (default is Close).
• Length: Used as a fallback for internal length calculations to ensure stable execution.

FAQ

How do I use the thermal bands for entries?

Traders often look for price to react near the darkest bands, as these represent levels where the market has found equilibrium in the past.

Can I change the start time for different sessions?

Yes, by adjusting the Year, Month, and Day settings, you can anchor the calculation to specific events like a market open, a significant news release, or a fiscal quarter start.

How can I access Time Based Thermal Support and Resistance V0?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.