Detecting and Trading Supply and Demand Zone Flips in MQL5
Summary
The article describes an MQL5 indicator that identifies supply and demand zones from higher-timeframe base-and-impulse patterns, then changes a zone’s role after a strong breakout. Zone boundaries come from the base candle, while an impulse candle must exceed a configurable size ratio to qualify. A flip requires a candle close beyond the zone and a range large enough relative to the zone’s height, intended to filter out intrabar spikes and weaker moves.
After a qualifying break, the indicator redraws the zone with the opposite supply or demand classification, extends its expiry, and can watch for retests and reversal patterns such as engulfing candles or pin bars. The article explains the indicator’s event flow and adjustable parameters, and reports that the implementation was tested as a charting tool. It offers no quantified trading or out-of-sample performance evidence; the thresholds are configurable heuristics, and zone interpretation remains dependent on the chosen pattern rules and timeframe.
Key ideas
- Zones are formed from a small base candle followed by a larger directional impulse on a higher timeframe.
- A zone flip requires both a close beyond the boundary and a sufficiently large candle range relative to zone height.
- A qualifying breakout changes the zone’s supply or demand role and extends its displayed lifetime.
- The indicator can flag reversal patterns when price revisits an active zone.
- The article describes a visualization tool, but does not establish profitability through quantified trading results.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.