Strong Demands & Supplies + Liquidity | Zonas de Compra e Venda

The Strong Demands & Supplies + Liquidity | Zonas de Compra e Venda indicator identifies high-probability supply and demand zones filtered for premium relevance across multiple timeframes. It integrates liquidity analysis to provide confluence for potential price targets and reversals by highlighting where significant market interest resides.

Usage

The Usage section focuses on how traders can interpret the various zones and liquidity levels generated by the script.

• Supply & Demand Zones: The indicator automatically plots green (Demand) and red (Supply) boxes. These zones are optimized to show the most relevant areas where price is likely to react. Zones identified on higher timeframes (1H and above) are considered stronger and more capable of sustaining price trends.
• Liquidity Confluence: Horizontal lines indicate daily (Blue), weekly (Yellow), and monthly (Purple) liquidity levels. When these lines reside near or within a supply or demand zone, the zone is categorized as a "stronger" price target or reversal point due to the gathered orders.
• Market Structure: The script displays internal structure, including "Change of Character" (CHoCH) and "Break of Structure" (BOS), to help users identify trend shifts and continuations.
• Imbalance Identification: Purple boxes represent price imbalances (Fair Value Gaps) between buy and sell orders. These act as magnets for price action as the market seeks to "fill" the efficiency gap.

Details

The script is inspired by Smart Money Concepts (SMC) principles. It utilizes an optimized algorithm to filter out "noisy" or minor zones, focusing specifically on premium areas that represent significant institutional activity.

The liquidity feature serves as a secondary filter. In SMC theory, liquidity often acts as "fuel" for market moves; by identifying where large clusters of orders exist (Daily/Weekly/Monthly highs/lows), the script provides a roadmap for where price is likely to draw toward before a reversal. The implementation includes logic for identifying engulfing candles and EHPDA (averages between opening gaps) to further refine entry and exit points.

Settings

Configuration

• Show Previous day High and Low: Toggles the visibility of the previous day's extreme price levels.
• Color of previous day high and low: Sets the color for the daily high/low horizontal lines.
• Show Labels in English: When enabled, labels appear in English; when disabled, they appear in Portuguese.
• Show Internal Structure: Toggles the display of internal BOS and CHoCH labels.
• Show Demand and Supply Zones: Enables or disables the rendering of the primary supply and demand boxes.
• Color of imbalances: Sets the fill color for identified imbalance/void zones.
• Color of liquidity lines: Sets the base color for the liquidity levels.
• Color of demand_zone and choch lines: Sets the theme color for bullish areas.
• Color of supply_zone and choch lines: Sets the theme color for bearish areas.

Engulfing

• Mark Engulfing candles with arrows: Toggles visual markers (arrows) for bullish and bearish engulfing patterns.

EHPDA

• Show EHPDA: Toggles the display of averages between New Week and New Day opening gaps.
• Amount: Determines the number of historical EHPDA levels to display on the chart.

FAQ

What do the different liquidity line colors represent? Blue lines represent Daily liquidity, Yellow lines represent Weekly liquidity, and Purple lines represent Monthly liquidity.

How do I identify a "Strong" zone versus a "Weak" one? A zone is considered stronger if it is identified on a higher timeframe (like 1H, 4H, or Daily) or if it has major liquidity lines (Weekly/Monthly) overlapping with the box.

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