Auto Supply & Demand Zones

The Auto Supply & Demand Zones indicator is a comprehensive charting tool that identifies and manages supply and demand areas by combining compact base structures with directional displacement. It helps traders track where price has left an area with significant urgency, maintaining these zones for future reference while dynamically evolving their status based on price interaction.

Usage

This tool is used to identify high-probability reaction areas on a chart. It categorizes zones into three states: Fresh, Tested, and Expired.

• Fresh Zones: Newly created areas where price has not yet returned. These are often viewed as high-interest zones for potential reactions.
• Tested Zones: Areas that have seen a qualifying retest. The script tracks how many times a zone has been touched before it loses its significance.
• Expired Zones: Areas that no longer meet active criteria, such as being breached by a distal close-break or exceeding the maximum allowed tests.

Traders can utilize the "Visibility" modes—All, Balanced Focus, and Smart Focus—to declutter the chart and focus only on the most decision-relevant structures. The integrated Light Higher-Timeframe (MTF) overlay allows for checking structural alignment without switching timeframes.

Details

The script operates on a base-plus-displacement framework. It first identifies a "base cluster" (a group of candles within a specific ATR-relative range). Once a base is confirmed, the script looks for a "displacement candle" that exhibits directional conviction and closes with significant body size relative to the ATR.

A unique feature of this tool is the Same-Side Merge Logic. To prevent the stacking of redundant boxes, the script merges or refreshes zones that form too close to existing ones on the same side. Furthermore, the script manages a zone's lifecycle through a 0-100 quality score, evaluating factors like displacement strength, reaction count, and volume baseline (where available).

Settings

Supply Demand Engine

• Zone Pivot Length: The number of bars required on both sides to confirm a supply or demand origin.
• Max Zone Age: The maximum number of bars a zone stays active on the chart.
• Sensitivity: Controls the strictness of origin displacement (Conservative, Balanced, or Aggressive).

Zone Score Model

• Origin Displacement ATR: The minimum ATR-normalized move required to validate a new zone.
• Max Zone Thickness ATR: Limits the vertical height of detected zones to keep them visually manageable.
• Mitigation Depth: The percentage of the zone that can be consumed before it is considered mitigated.

Chart Visuals

• Max Visible Zones Per Side: Limits the number of active zones shown to prevent overcrowding.
• Zone Label Mode: Chooses between "Right Edge Callout" or "Centered Inside" for zone descriptions.
• Forward Render Bars: Determines how far the active zones extend to the right of the current price.

FAQ

How do I access Auto Supply & Demand Zones? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Can I set alerts for when a zone is touched? Yes, the script includes built-in alert support for events such as "New Zone Created," "Fresh Zone Touched," and "Zone Expired."

Does this script show Higher Timeframe zones? Yes, it includes a "Light MTF View" setting that overlays subtle higher-timeframe supply and demand layers for added context.