Smart Supply & Demand Zones

The Smart Supply & Demand Zones indicator identifies and manages institutional interest areas based on swing points and market volatility to provide clean price action insights.

Usage

The Smart Supply & Demand Zones tool is used to identify high-probability reversal or continuation areas. Unlike traditional supply and demand indicators that clutter the screen with historical data, this script focuses on active points of interest (POIs).

Traders can use this tool to:

• Identify POIs: Demand zones are plotted when a significant pivot low is formed, while supply zones are plotted at pivot highs.
• Filter Noise: The indicator utilizes "Body-Close Logic," meaning a zone remains valid even if price wicks through it. A zone is only invalidated and removed when a candle closes entirely beyond the zone's boundaries.
• Manage Entries: Once price enters a zone, traders can look for secondary confirmation to enter trades.
• Clean Workflow: The tool automatically deletes mitigated zones, ensuring the user only sees relevant levels.

Details

The script identifies zones based on pivot points defined by the "Swing Length" setting. Once a pivot is detected, a zone is drawn starting from the high/low of that pivot. The vertical width of the zone is calculated dynamically using an ATR (Average True Range) multiplier, allowing the zones to adapt to current market volatility rather than being fixed in size.

The "Smart Mitigation" logic is a core technical feature; by requiring a candle body close outside the zone for invalidation, the script protects users from premature zone removal during liquidity sweeps or stop hunts.

Settings

Zone Logic

• Swing Length: Determines the lookback period used to identify pivot highs and lows. Higher values result in fewer, more significant zones.
• Zone Width (ATR Multiplier): Adjusts the thickness of the supply and demand boxes based on the current ATR. Higher values create wider zones.

Zone Colors

• Supply Zone: Customizes the color and transparency of the supply (resistance) zones.
• Demand Zone: Customizes the color and transparency of the demand (support) zones.

FAQ

How do I access Smart Supply & Demand Zones?

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 uses an auto-cleaning mechanism. A zone is automatically deleted from the chart once a candle closes outside its boundaries, indicating the zone has been mitigated or broken.

Can I adjust how often zones appear?

Yes, by increasing the "Swing Length" in the settings, you will filter for more significant price turns, resulting in fewer but potentially stronger zones.