Precision Market Entropy Heatmap [LuxAlgo]

The Precision Market Entropy Heatmap [LuxAlgo] indicator provides a high-resolution visualization of volume distribution and market activity within specific anchor intervals using intrabar data.

By utilizing lower timeframe (LTF) precision, it maps out where the most significant trading activity occurred, allowing traders to identify institutional interest zones and "fair value" areas through a dynamic heat-mapped profile.

🔶 USAGE

The indicator segments the chart into blocks based on the selected Anchor Interval. Within each block, a vertical distribution of volume is calculated using the Intrabar Precision setting to ensure the heatmap accurately reflects market participation at specific price levels.

• Heatmap Blocks: Brighter colors represent higher volume concentrations (high entropy). These areas often act as significant support or resistance zones where the market has previously found "fair value" or high liquidity.
  
• Identifying Institutional Interest: High-volume "bright" nodes represent price levels where heavy institutional participation occurred. These nodes act as powerful magnets or barriers for future price action.
  
• Navigating Liquidity Voids: Darker areas indicate low volume nodes (low entropy). Price often "slips" through these gaps quickly. Traders can use these zones to anticipate fast-moving price action or set targets beyond the void.
  
• Trend Direction via POC: Observe the slope and shifts of the Developing POC polyline. An ascending POC confirms bullish value migration, while a descending one suggests bearish value migration.
  
• Mean Reversion: Significant price deviations from the largest high-volume node, when the POC remains static, can signal that the market is overextended and likely to return to "fair value."
  
• Breakout Validation: Use the blocks to identify compression zones. A breakout is more reliable when the POC shifts into the new range, confirming that the move is backed by volume and accepted by the market.
  
• POC Extensions: Dashed lines extend the session's final POC. These are dynamically colored based on their relationship to the current price: Green if the POC is below the current price (potential support) and Red if above (potential resistance).
  

🔶 DETAILS

Unlike standard Volume Profiles that look at fixed ranges, this script focuses on "Entropy" by visualizing the density of distribution across a user-defined grid.

By requesting security data from lower timeframes, it provides a much more granular view of price action than what is visible on the current chart timeframe alone.

The indicator uses a gradient-based coloring system to distinguish between low-activity areas and high-volume nodes, making it easier to spot "Liquidity Voids" (darker areas) and "High Volume Nodes" (brighter areas).

🔶 SETTINGS

🔹 Heatmap Settings

• Anchor Interval: Sets the timeframe that defines each heatmap block (e.g., "D" for Daily blocks).
  
• Intrabar Precision: Determines the lower timeframe used to calculate the volume distribution. Lower values (like "1m") provide higher precision but are limited by available historical data.
  
• Number of Rows: Controls the vertical price resolution of the heatmap grid. Higher values create a more detailed but computationally heavier profile.
  

🔹 Style Settings

• Heatmap Intensity: A three-color gradient selector that defines the color transition from low to high volume areas.
  
• Heatmap Transparency: Adjusts the visibility of the heatmap blocks on the chart.
  
• POC Extension (Bull/Bear): Sets the colors for the dashed POC lines based on whether they are currently below (Bull) or above (Bear) the market price.
  
• Show Developing POC: Toggles the visibility of the real-time POC polyline.
  
• Auto: When enabled, the developing POC color automatically syncs with your chart theme's foreground color.
  

🔹 Display Settings

• Max Sessions to Show: Limits the number of historical heatmap blocks rendered on the chart to maintain performance.
  
• Extend POCs to Current Bar: When enabled, historical POC lines will extend to the far right of the chart until they are replaced by newer sessions.