ATR-Scaled Supply and Demand Zones with Close-Based Breaks
Summary
This indicator identifies confirmed swing highs and lows, then draws supply and demand zones around them. A pivot requires ten bars on each side, so it is confirmed with a delay. Zone thickness scales with ATR, and a new zone is rejected when its midpoint falls within two ATRs of an existing live zone on the same side. A close beyond a zone boundary marks it broken and draws a break-of-structure line at its midpoint; a wick alone does not invalidate the zone.
The document explains configurable pivot length, zone width, ATR period, overlap radius, and display limits, and outlines the warm-up and drawing behavior. It offers design detail rather than trading evidence: there are no backtests or outcome statistics. The author cautions that zones only mark prior turning areas; the indicator does not account for trend direction or whether a zone has already been tested, so using zones alone can produce poorly aligned trades.
Key ideas
- Confirmed pivots create supply zones at swing highs and demand zones at swing lows.
- Zone thickness and same-side overlap spacing are scaled using ATR.
- A close beyond a zone boundary invalidates it and leaves a break-of-structure line at its midpoint.
- Pivot confirmation creates a delay, and the indicator requires a warm-up period.
- Zones alone do not provide trend filtering or account for prior tests, and no performance evidence is presented.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.