Supply Demand Pro - VWAP + Liquidity Confluence

The Supply Demand Pro - VWAP + Liquidity Confluence indicator detects institutional supply and demand zones using a three-layer confluence model involving quantitative grading, VWAP proximity, and liquidity sweep detection. It identifies high-probability reversal areas by filtering for volatility expansion and institutional participation while providing real-time performance tracking via an integrated backtest panel.

Usage

The Usage section describes how the script can be used to identify institutional interest and potential trade entries.

Zone Identification

• Demand Zones (Green Boxes): Formed when an explosive bullish move follows a consolidation base.
• Supply Zones (Red Boxes): Formed when an explosive bearish move follows a consolidation base.
• HTF Zones (Dashed Blue): Displays zones from a higher timeframe (e.g., 4H zones on a 15m chart) to identify structural bias.

Interpretation of Confluence Tags

• Grade Badges (A+, A, B, C): Found inside zones, these indicate the quality of the move based on volume, volatility, and location.
• ⊕V Tag: Indicates the zone aligns with the Session VWAP, marking "fair value" confluence.
• ⊕H Tag: Indicates the zone overlaps with a Higher Timeframe zone, increasing its structural significance.

Signal Types

• Regular BUY/SELL (Triangles): Fires when price returns to a zone and shows rejection (wick confirmation) while the trend filter is satisfied.
• ⚡BUY/⚡SELL (Sweep Signals): These premium signals fire when price "sweeps" below a demand zone (or above supply) and immediately reclaims it, signifying an institutional stop hunt.

Details

The indicator uses a strict quantitative methodology to ensure zones are high-quality and non-repainting:

• Zone Formation: Requires a bar range greater than the ATR multiplier and a candle body exceeding 55% of the total range to confirm "explosive" movement.
• Grading System: Each zone is assigned a score (0–100). Points are awarded for move strength (30 pts), volume (20 pts), VWAP proximity (25 pts), HTF overlap (20 pts), and freshness (5 pts).
• Mitigation Logic: Zones are automatically removed from the chart based on the chosen mode. "Body Close" removes the zone if a candle closes through it, while "Wick Touch" removes it upon any contact.
• Backtest Panel: The script tracks the last 50 signals (default) and calculates a real-time win rate and R-multiple based on ATR-calculated Take Profit and Stop Loss levels.

Settings

Zone Detection

• Max Base Candles: Limits how many consolidation candles are included in the zone's base.
• Move Strength (ATR x): Sets the volatility threshold required to define an "explosive" move.
• Require Volume Confirmation: When enabled, zones only form if volume exceeds the moving average.

Signal Filters

• Min Zone Grade: Filters signals so only zones with a specific grade (e.g., A or higher) trigger alerts.
• Min Rejection Wick %: Requires a minimum wick size relative to the candle body to confirm price rejection.
• Cooldown Bars: Prevents signal clusters by requiring a specific number of bars between entries.

Liquidity Sweep & MTF

• Enable Sweep Signals: Activates the stop-hunt detection logic.
• HTF Resolution: Defines the timeframe used for the dashed blue structural zones.
• VWAP Confluence: Toggles whether proximity to VWAP boosts the zone's grade.

FAQ

How do I interpret the A+ grade? An A+ grade means the zone formed with high volume and volatility, is fresh, and aligns with both the Session VWAP and a Higher Timeframe zone. These represent the highest probability areas for a reaction.

Why did a signal not fire when price touched a zone? A signal requires several conditions: the zone must meet your "Min Grade" setting, the candle must show a rejection wick of the required size, and the price must be on the correct side of the Trend EMA.

How can I access the Supply Demand Pro - VWAP + Liquidity Confluence? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.