Smart Money Range
Aug 21, 2023
The Smart Money Range indicator provides traders with a comprehensive view of market structure by identifying key support and resistance levels within a defined trading range. It helps visualize market dynamics by highlighting significant price areas where buying and selling pressure have historically concentrated.
Usage
The Smart Money Range tool is used to identify established trading boundaries and the strength of those boundaries through specific visual cues:
- Range Identification: The script automatically demarcates a high and low range based on significant historical price action. These levels serve as primary areas for potential reversals or breakouts.
- Touch Counting: Numerical labels appear beneath the support and resistance lines, indicating how many times the price has interacted with these specific levels. A higher count often suggests a more significant or "tested" level.
- Zig-Zag Projections: The indicator draws a zig-zag pattern within the range to project potential future paths and touches, assisting traders in anticipating internal price movements.
- Dual-Sided Profile: On the right side of the chart, a profile displays two metrics: volume traded at price levels (one side) and the frequency of price touches (other side). This helps confirm which price points within the range hold the most market interest.
Details
The indicator utilizes pivot points and historical lookbacks to determine the "Smart Money" range. It employs a touch counter logic that scans historical bars (up to 2000 bars) to find instances where price crossed specific horizontal levels. The volume profile component is constructed by dividing the range into "bins" or levels, then calculating the relative volume and activity within each bin to provide a density-based view of the market structure.
Settings
Main Core Settings
- period: Adjusts the lookback period used for identifying pivots and the overall range.
- Volume Levels: Determines the number of vertical bins used in the dual-sided profile.
Visuals Settings
- Show Volume: Toggles the visibility of the volume/touch profile on the right.
- Random Coloring: When enabled, applies randomized colors to the profile and lines for visual variety.
- 1st / 2nd Color: Sets the specific colors for the two sides of the profile.
- Show Zigzag: Toggles the display of the internal zig-zag projection lines.
- Line Color: Sets the color for the zig-zag projection lines.
FAQ
How do I interpret the numerical values on the lines?
The numbers represent the "Touches Counter," showing how many times the price has historically interacted with that specific support or resistance level.
What does the dual-sided profile indicate?
One side represents the volume distribution at price levels, while the other side represents the density of price "touches" at those levels, helping identify the strongest zones within the range.
How can I access this tool?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
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