Supply and demand

How it works

The indicator creates supply and demand zones by analyzing price movement using Average True Range (ATR) and specific reaction criteria. It requires price to travel a minimum distance within a set number of bars, establishing zones that demonstrate significant market interest.

Zones are dynamically evaluated based on their interaction with price, such as being unmitigated, retested, or broken and retested. The indicator uses trend confirmation methods like SMA50 and SMA200 to validate zone creation, ensuring zones align with the current market trend.

Why it may be useful

This signal provides traders with a sophisticated method to identify high-probability trading zones by filtering out less significant price movements. By focusing on zones with proven market reaction and trend alignment, traders can make more informed decisions about potential entry and exit points.

The dynamic nature of the indicator allows for adaptable zone identification across different market conditions, helping traders recognize key support and resistance levels that might otherwise be overlooked.

When to explore it

The indicator works best in trending markets with clear directional movement, where price consistently respects supply and demand zones. It is particularly effective when used on timeframes that provide sufficient price action for zone formation, such as daily or 4-hour charts.

Traders should apply this signal when seeking to identify high-quality trading opportunities with clear risk management parameters, especially in markets that demonstrate consistent trending behavior and meaningful price reactions.

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