Strong PDH PDL Zones | ProjectSyndicate

The Strong PDH PDL Zones indicator power-ranks daily price levels to identify high-probability reaction zones based on previous day market behavior. By scoring the Prior Day High (PDH) and Prior Day Low (PDL) from 0–10 using data-validated factors, it allows traders to differentiate between levels likely to hold as reversals and those likely to facilitate breakouts.

Usage

The Usage section describes how the script can be used to frame intraday price action around significant liquidity levels. The script categorizes levels into tiers (FORMING, WEAK, MODERATE, STRONG, ELITE) to dictate trading logic:

• Reversal Trading (Fading the Trap): Best applied to STRONG or ELITE levels (scores $\ge$ 7). Users look for price to penetrate the PDH/PDL and reach the "Sweep Trap" zone before failing and closing back within the level.
• Breakout Trading: Best applied to WEAK or MODERATE levels. Users look for a decisive close beyond the "Price Breakout" line on expanding volume, signaling that the previous day's extreme is unlikely to hold.
• Mean Reversion: The "Golden Pocket" zone (50–61.8% retracement) acts as a high-probability target for mean-reversion trades or a zone for intraday pullback entries.

Details

The indicator utilizes a multi-factor scoring model to determine level quality. Every PDH and PDL earns a grade based on five factors:

1. Prior-Day Volume: Volume relative to its baseline (higher volume increases strength).
2. Range Significance: Prior-day range relative to the Average Daily Range (ADR).
3. Rejection Quality: How far the previous day's close was from its extreme.
4. Round Number Proximity: Levels near round numbers are statistically swept more often, resulting in lower scores.
5. Isolation: Levels clustered with recent daily extremes are more likely to break, whereas isolated levels score higher.

The tool uses a uniform ATR-based thickness for all zones to ensure visual consistency across different instruments. Levels are non-repainting; they lock in once the prior session completes and do not change intraday.

Settings

Zones

• Days of Zones to Plot: Determines how many historical days are kept on the chart.
• Universal Height — ATR Length: The period for the daily ATR calculation used for zone sizing.
• Universal Zone Height (× daily ATR): Adjusts the thickness of PDH, PDL, and Golden Pocket zones.
• Shade Zone Opacity by Strength: When enabled, stronger levels appear more opaque.

Strength Scoring

• ADR / Volume Baseline (days): The lookback period for calculating average range and volume.
• Weights (Volume, Range, Rejection, Round-Number, Isolation): Customizable weights for the five scoring factors.
• Hide Levels Below Score: Filters out low-quality levels from the chart.

Dashed Levels

• Sweep Trap Offset: Sets the distance for the liquidity grab zone beyond the PDH/PDL.
• Price Breakout Offset: Sets the distance for the confirmed breakout line.

Colors

• PDH/PDL/GP Zone Colors: Customizable colors for each primary zone.
• Zone Transparency: Adjusts the base transparency for the weakest levels.

FAQ

How can I tell if a level is strong without looking at the score? If "Shade Zone Opacity by Strength" is enabled, the indicator will automatically render the zones with higher opacity for strong levels and more transparency for weak levels.

Does the script repaint its scores? No. The scores and zones are calculated at the start of a new session based on the completed data of the previous day and remain fixed throughout the current session.

How do I get access to the Strong PDH PDL Zones? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.