Volume Profile / Order Blocks + Demandas e Ofertas Fortes

The Volume Profile / Order Blocks + Demandas e Ofertas Fortes indicator identifies and highlights significant areas of volume and price liquidity to help traders pinpoint potential trend reversal zones and supply/demand imbalances. This tool integrates bar-magnified order blocks with localized volume profiles to provide a high-resolution view of market interest at specific price levels.

Usage

The Usage section describes how the script can be used to identify key market structures. This tool is primarily used to locate "Order Blocks"—areas where institutional buying or selling is suspected—and overlay them with a volume profile to see exactly where the highest concentration of trading occurred within that block.

• Identifying Zones: The indicator automatically plots boxes on the chart representing demand (bullish) and supply (bearish) order blocks.
• Volume Distribution: Within each order block, the script generates a horizontal histogram. Darker or more opaque colors represent "High Volume Nodes," indicating price levels where the most significant exchange of contracts took place.
• Rejection and Mitigation: Traders can use these zones to anticipate price reactions. A rejection from a high-volume node within an order block often serves as a high-probability entry signal. The zones are removed (mitigated) once price crosses a user-defined threshold.

Details

The script utilizes a "Bar-Magnified" approach by using the request.security_lower_tf function to pull data from lower timeframes. This allows the indicator to calculate the volume distribution within a single candle or a small group of candles more accurately than using standard timeframe data.

The detection logic for Order Blocks is governed by a "Tuning" parameter, which looks for specific sequences of candle closes to confirm a change in local market character. Once a block is identified, the script segments the price range into a grid and allocates volume based on lower timeframe price action. The "Mitigation Method" logic ensures that the chart remains clean by deleting zones once they have been sufficiently tested or "filled" by subsequent price action.

Settings

Main Settings

• Tuning: Determines the sensitivity of the order block detection. A higher value requires more confirmation candles, resulting in fewer but more significant zones.
• Amount Of Grids: Sets the number of horizontal rows used to calculate the volume profile within each order block.
• Mitigation Method: Defines the criteria for removing an order block from the chart. Options include price closing or wicking through 25%, 50%, 75%, or 100% of the block's range.

Color Settings

• High Volume: Sets the color and transparency for the price levels within the block containing the most volume.
• Low Volume: Sets the color and transparency for the price levels within the block containing the least volume.
• Border: Sets the color for the outer boundaries of the order block.
• Line Fill: Sets the background color for the area between the top and bottom boundaries of the block.

FAQ

How do I interpret the different colors within the order block boxes?
The colors represent volume intensity. The "High Volume" color highlights the Point of Control (POC) or the most traded area within that specific price structure, while the "Low Volume" color represents areas of less interest.

Why do some order blocks disappear over time?
Order blocks are removed based on the "Mitigation Method" setting. When price action moves through the block according to your selected percentage (e.g., a candle close 50% through the block), the zone is considered mitigated and is deleted to keep the chart focused on relevant data.

How can I access the Volume Profile / Order Blocks + Demandas e Ofertas Fortes?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.