Supply and Demand Zones

The Supply and Demand Zones indicator automatically plots multi-timeframe areas of interest on the chart to help traders identify key levels of institutional buying and selling pressure.

Usage

The indicator can be used to identify potential reversal or continuation areas by visualizing Daily, Weekly, and Monthly supply and demand zones. Traders typically look for price to enter a supply zone (red) for potential short opportunities or a demand zone (green) for potential long opportunities. Because these zones are derived from higher timeframes, they act as significant support and resistance levels that can guide trade entries, stop-loss placement, and profit targets.

Details

The script calculates zones based on the open price and the average true range (ATR) equivalent—specifically the 5-period and 10-period Simple Moving Average (SMA) of the high-low range—from daily, weekly, and monthly timeframes. By centering these range-based calculations around the period's opening price, the indicator creates channels that represent the expected volatility and liquidity areas for that specific timeframe. This method provides a objective way to visualize supply and demand without the subjectivity of manual drawing.

Settings

• Daily: Toggles the visibility of the Daily supply and demand zones.
• Weekly: Toggles the visibility of the Weekly supply and demand zones.
• Monthly: Toggles the visibility of the Monthly supply and demand zones.

FAQ

How do I use these zones for trading?

The zones act as high-probability areas where price may react. You can look for price action confirmation, such as candlestick patterns, when the price enters a highlighted supply or demand area.

Can I use this on any timeframe?

Yes, the indicator uses "security" calls to fetch data from higher timeframes, so you can view these Daily, Weekly, and Monthly levels even while trading on lower timeframes like the 5-minute or 1-hour charts.

How do I access Supply and Demand Zones?

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