Dynamic Supply and Demand Zones [AlgoAlpha]

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Introducing the Dynamic Supply and Demand Zones by AlgoAlpha. This indicator is designed to automatically identify and visualize dynamic supply and demand zones on your chart, helping traders pinpoint potential reversal areas and assess market sentiment with enhanced clarity. It adapts to market conditions using a dynamic look-back mechanism, making it more responsive to recent price movements. 📈💡

Key Features

• 📊 Dynamic Look-Back: Automatically adjusts the look-back period based on the most recent pivot point, ensuring the most relevant data is analyzed.
  
• 🎯 Pivot Point Detection: Utilizes a user-defined period to detect significant pivot highs and lows, marking potential reversal points with precision.
  
• 🛠 Customizable Parameters: Offers extensive customization options including look-back period, pivot detection sensitivity, resolution, and zone tolerance.
  
• 🗺 Visual Display: Shows supply and demand zones as boxes on the chart, with optional profiles and background highlighting to differentiate between bullish and bearish zones.
  
• 🖍 Color-Coded Zones: Zones are color-coded for easy identification: green for bullish, red for bearish, and gray for neutral levels.
  
• 🔔 Alert Conditions: Triggers alerts when new pivot points are detected, ensuring you never miss a key market movement.
  

How to Use

🚀 Adding the Indicator: Press the star icon and add the indicator to favorites. Add it to your chart and adjust settings to fit your trading strategy.


🔍 Zone Analysis: Observe the color-coded zones on the chart. Bullish zones indicate potential support areas, while bearish zones suggest resistance. Monitor price interactions with these zones for potential entry and exit signals.


🔔 Alerts: Activate alert conditions for new pivot detections to stay ahead of market reversals.


How It Works

The indicator starts by detecting pivot highs and lows over a specified period. These pivots serve as reference points for determining the analysis range. If the Dynamic Look-Back feature is enabled, the look-back range dynamically adjusts from the most recent pivot to the current bar. Otherwise, a fixed look-back period is used. The price range is divided into multiple bins based on a specified resolution, and each bin’s volume is calculated by accumulating the volume of candles that fall within its price range. A zone is defined as significant if its volume is less than the adjacent bins, and the difference meets the Zone Tolerance criteria, indicating a potential area of support or resistance. These zones are then plotted on the chart as boxes. Bullish zones are shown in green, and bearish zones in red, helping traders visually identify key levels where supply and demand imbalances may cause price reversals.

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