Supply and Demand Levels

The Supply and Demand Levels indicator automatically identifies and plots fresh supply and demand zones based on specific candlestick price action patterns to highlight potential reversal points.

Usage

The Usage section focuses on identifying price levels where institutional selling or buying pressure may occur. A Supply zone is formed when a green candle is followed by a red candle that does not break the high of the green candle and closes below its low. Conversely, a Demand zone is formed when a red candle is followed by a green candle that does not break the low of the red candle and closes above its high.

Users can utilize these zones as potential entry or exit points. The indicator is designed to automatically remove zones once they are "mitigated" or touched by price action, ensuring the chart remains clean and only displays active areas of interest. For best results, users should combine these levels with other technical analysis tools like Fair Value Gaps (FVG) or Market Structure Breaks (MSB).

Details

The indicator calculates zones based on a two-candle sequence. The logic requires the second candle to be an "engulfing" or "displacement" candle that fails to break the outer wick of the first candle but successfully closes beyond the body/wick in the opposite direction. This specific price action suggests a shift in order flow. The tool also supports Multi-Timeframe (MTF) analysis, allowing traders to view zones from higher timeframes on their current chart. To maintain performance and relevance, all zones are cleared at the start of a new day.

Settings

• Zone Timeframe: Allows you to select the timeframe from which the supply and demand levels are calculated. Leaving this blank defaults to the current chart timeframe.
• Zone Transparency: Adjusts the visibility of the plotted supply and demand boxes on the chart.
• Max Boxes (safety): Sets a limit on the maximum number of active boxes displayed to ensure platform performance.

FAQ

How do I access the Supply and Demand Levels?

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

Why do some zones disappear?

The indicator is programmed to remove supply and demand levels that have already been hit by price action. This ensures you are always looking at "fresh" levels that have not been tested yet.

Can I use this on any timeframe?

Yes, the indicator is designed to function on every timeframe, from scalping charts to long-term daily or weekly trends.