Building a Time-in-Price Heat Map for Trading Analysis

Summary

The article describes an indicator that divides an observed price range into levels and measures how many bars intersect each level. It normalizes those counts into relative presence values and displays them as a color gradient, with cooler colors marking brief visits and blue marking areas where price spent more time. A sliding history window, adaptive grid size, lazy recalculation, and reuse of allocated arrays are presented as ways to control computation and chart-object overhead.

The author interprets high-presence zones as areas price may revisit or use as support or resistance, while low-presence zones may be crossed quickly; suggested uses include bounces, breakouts, and combinations with volume or other indicators. These interpretations are presented as trading guidance, not supported by backtest statistics or quantified validation in the article. The proposed settings and claims about market behavior should therefore be treated as hypotheses to test across instruments and regimes.

Key ideas

• The indicator estimates time at price by counting bars whose high-low ranges overlap each price zone.
• Relative presence is scaled across levels and shown through an interpolated color gradient.
• A bounded history window and adaptive level grid aim to balance detail with runtime and rendering costs.
• The article associates high-presence zones with possible revisits and low-presence zones with faster price movement.
• The suggested bounce and breakout interpretations are not accompanied by quantified performance tests.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.