Supply & Demand Zones

This indicator detects high-probability supply and demand zones using a multi-step smart money concept approach:

Liquidity Sweep Detection: Identifies when price sweeps above a pivot high (supply setup) or below a pivot low (demand setup), capturing liquidity grabs by institutional traders.

Displacement Confirmation: Requires a strong displacement candle (measured by ATR and body percentage) or fair value gap (FVG/imbalance) in the opposite direction after the sweep.

Volume Confirmation: Optional filter ensures zones form only when volume exceeds the user-defined threshold, indicating institutional participation.

Smart Filtering: Built-in logic prevents overlapping zones, enforces minimum spacing between signals, and requires confirmation bars to eliminate false signals.

Zone Lifecycle Management: Zones are automatically removed when price closes through them with momentum. Breached zones can optionally "flip" to the opposite type when re-tested with strong displacement.

✨ Key Features

• Clean Visual Display: Small "D" (Demand) and "S" (Supply) labels with shaded zone boxes
  
• Non-Repainting: All signals use confirmed historical data—no lookahead or repainting
  
• Volume Filter: Optional confirmation using volume spike detection
  
• Zone Flip Logic: Breached demand zones can become supply (and vice versa) when violated
  
• Overlap Prevention: Smart algorithm prevents clustered or duplicate zones
  
• Confirmation Delay: Configurable wait period after sweep to confirm genuine setups
  
• Customizable Inputs: Adjust pivot sensitivity, displacement thresholds, volume filters, and more
  
• Alert Ready: Built-in alert conditions for new supply and demand zone formations
  

🎯 How to Add to Your Chart

• Favorite the Indicator: Click the star icon to add this script to your favorites
  
• Open Your Chart: Navigate to the asset and timeframe you want to trade (works best on 5m-1H intraday charts)
  
• Add Indicator: Click "Indicators" at the top, search for "Supply & Demand Zones (Smart Filtered)", and add to chart
  
• Customize Settings: Click the gear icon ⚙️ to adjust inputs based on your trading style and instrument volatility
  
• Set Alerts: Right-click the indicator name → "Add alert" → Select "Supply Zone" or "Demand Zone" conditions
  

📖 How to Use
Demand Zones (Green "D" Labels):
Price swept below a swing low (liquidity grab)
Strong bullish displacement or imbalance followed
Trading Action: Look for LONG entries when price returns to the zone or on immediate continuation
Stop Loss: Place just below the zone or sweep low
Target: Next resistance level, supply zone, or risk-reward ratio target

Supply Zones (Red "S" Labels):
Price swept above a swing high (liquidity grab)
Strong bearish displacement or imbalance followed
Trading Action: Look for SHORT entries when price returns to the zone or on immediate continuation
Stop Loss: Place just above the zone or sweep high
Target: Next support level, demand zone, or risk-reward ratio target

Flipped Zones (Orange Labels):
Previous demand/supply zone was broken with strong momentum
Zone has flipped polarity and may now act as the opposite type
Trading Action: Exercise caution—wait for additional confirmation before trading flipped zones

🔍 What to Look For
High-Quality Setups:

• Zone forms with above-average volume (check volume filter is enabled)
  
• Clear liquidity sweep visible on the chart
  
• Strong displacement candle with large body percentage
  
• Zone aligns with overall market trend or key structure levels
  
• Multiple timeframe confirmation (check higher timeframe for context)
  

Avoid These Setups:

• Zones forming in choppy, low-volume conditions
  
• Multiple overlapping zones in the same area (indicator filters these automatically)
  
• Zones that appear immediately after news events (set confirmation bars higher)
  
• Counter-trend zones without additional confluence
  

⚙️ Recommended Settings by Timeframe

5-Minute Charts (Scalping):
Pivot Lookback: 3/3
Min Displacement ATR: 0.9
Confirmation Bars: 1
Min Zone Spacing: 3-5 bars
Volume Threshold: 1.2x

15-Minute Charts (Intraday):
Pivot Lookback: 4/4 (default)
Min Displacement ATR: 1.0 (default)
Confirmation Bars: 2 (default)
Min Zone Spacing: 5-8 bars
Volume Threshold: 1.2x

1-Hour Charts (Swing Trading):
Pivot Lookback: 5/5
Min Displacement ATR: 1.2-1.5
Confirmation Bars: 3
Min Zone Spacing: 8-12 bars
Volume Threshold: 1.3x

💡 Trading Tips & Best Practices

• Combine with Price Action: Use this indicator alongside candlestick patterns, support/resistance, and trendlines for confirmation
  
• Multiple Timeframe Analysis: Check higher timeframes for overall bias and major zones
  
• Volume is Key: Enable volume filter to focus on institutional-backed moves
  
• Risk Management: Always use stop losses and proper position sizing
  
• Backtesting: Test settings on your preferred instruments and timeframes before live trading
  
• Context Matters: Consider market conditions, news events, and session times
  
• Wait for Confirmation: Don't rush entries—wait for price reaction at the zone
  

⚠️ Important Disclaimers
Educational Purpose Only: This indicator is provided for educational and informational purposes. It does not constitute financial advice, investment recommendations, or trading signals.
No Guarantees: Past performance and backtested results do not guarantee future results. Trading involves substantial risk of loss.