Smart Zone Engine – Gnome Intelligence v3.4

Smart Zone Engine – Gnome Intelligence

Description: The Smart Zone Engine is an original, closed-source adaptive support and resistance detection system. It is not based on mashups of public indicators or traditional overlays like RSI, moving averages, or Bollinger Bands. Instead, it introduces a genome-inspired optimization model ("Gnome Engine") that evolves live on the chart to produce dynamic, adaptive structural levels based on real price action.

Technical Overview:
Core Components:

• Gnome Population (Grid Model): The engine initializes a fixed grid of Gnomes — virtual agents — each defined by three primary parameters:
  
  
• Lookback Period: The number of bars to search for pivot highs or lows.
  
  
• Zone Height Multiplier: The vertical size of zones relative to the detected pivot range.
  

Scoring System:

• Each Gnome accumulates "experience points" (XP) based on the frequency and quality of its pivot detections over a rolling window of bars (Pivot-Scan Window, user-configurable).
  
  
• A Gnome’s score improves if it successfully identifies valid pivots.
  
  
• Poor performance results in XP decay, eventually leading to replacement.
  

Mutation Engine:
Every 30 bars (default mutationFreq), the highest-XP Gnome mutates:

• It spawns a nearby Gnome with slightly altered parameters (up/down lookback, height, or spacing).
  
  
• This ensures gradual optimization toward better settings.
  

Explorer Scouts:
Independently, Explorer Gnomes (Scouts) are occasionally spawned to randomly explore new areas of the parameter space:

• If a Scout outperforms existing Gnomes, it is promoted to a regular Gnome.
  
  
• Otherwise, it expires after a fixed lifetime (scoutLife).
  

Dominant Gnome Selection:
At any given time, the Gnome with the highest XP defines the active detection parameters used to build zones:

• Lookback = dominant Gnome’s optimized pivot window.
  
  
• Height Multiplier = dominant Gnome’s preferred zone thickness.
  
  
• Spacing = dominant Gnome’s optimized minimum distance between zones.
  

Inputs and Data Used:

• Price Highs and Lows: Used for pivot detection through ta.pivothigh() and ta.pivotlow().
  These functions find localized swing points based on the Gnome’s current lookback setting.
  
  
• Bar Ranges (High–Low): The recent price range is calculated dynamically over the pivot window to adjust zone height sizing. Larger ranges create thicker zones; smaller ranges create tighter ones.
  
  
• Zone Midpoints: Midpoints between zone top and bottom are calculated for proximity filtering and flipping logic.
  
  
• Bounce Count: Each zone tracks how many times price has bounced within its boundaries. Bounces strengthen the zone (XP increment). Clean breaks weaken it (XP decay).
  
  
• Bar Index: Used to extend zones forward in time for a configurable number of bars (zoneExtendBars).
  
  
• Tick Size: (syminfo.mintick) is incorporated to ensure zone spacing scales properly across different markets.
  

How Zones Are Managed:

• Creation: New zones are created when valid pivots are detected and no existing nearby zone conflicts.
  
  
• Scoring and Strength: Zones increment their bounce counter after each valid price interaction. Labels update to show the number of bounces (e.g., 🔥3x).
  
  
• Flip Logic: If price breaks through a zone and retests from the opposite side: Support becomes Resistance or Resistance becomes Support automatically. The zone’s color and label update to reflect the change.
  
  
• Invalidation and Cleanup: Zones are deleted when:
  -They no longer receive valid bounces.
  -They are invalidated by clean breakouts.
  -The number of active zones exceeds the maximum (maxZones).
  
  
• What Traders See: Support zones plotted in translucent green boxes.
  -Resistance zones plotted in translucent red boxes.
  -Strength labels on each zone showing the bounce count.
  -Optional Debug Table showing current Gnome XP and scores (for transparency).
  

Purpose and Usefulness:
This system is designed for traders needing reliable, real-time evolving structural zones without the static assumptions of traditional indicators.

• The Smart Zone Engine adapts to changing price conditions, identifies emerging support/resistance automatically, and evolves its detection settings intelligently.
  
  
• It is a structural analysis tool — not a predictive signal generator — and should be used as part of a broader discretionary trading approach.
  

Limitations and Disclaimers:
This script analyzes historical price pivots; it does not predict future price action.

• Bounce counts are historical observations and do not guarantee future reactions.
  
  
• No slippage, commissions, or trading executions are modeled in this tool.
  
  
• Traders remain responsible for using zones responsibly within their risk management plans.
  

Access Instructions:

• This script is invite-only.
  
• To request access, please follow the instructions provided under the Author’s Instructions field.