Mapping Recent Volume by Price with a Liquidity Heatmap
Summary
The Liquidity Thermal Map displays recent trading volume across 31 price bands behind a price chart. It sets the bands from the high-low range over a selected lookback, then assigns each bar’s volume to the band nearest its close, often including an adjacent band. Colour intensity reflects volume relative to the busiest band; areas above the current close are marked as overhead supply and those below as potential support. A side ladder and totals summarize volume above and below price, including their difference.
The guide suggests using persistent bright bands as reference areas for support, resistance, breakout context, or mean-reversion analysis. Users can choose among 100-, 300-, and 600-bar profiles and adjust colour sensitivity. The tool describes where volume traded in its lookback window; it does not forecast whether a level will hold. The document explains the calculation and interpretation but gives no empirical performance evidence.
Key ideas
- The map bins the recent high-low range into 31 price rows and allocates volume based on bar closes.\nColour intensity indicates each row’s volume relative to the busiest row.\nThe display distinguishes volume above and below the current price and reports their imbalance.\nLookback depth and heatmap sensitivity are configurable.\nBright bands can provide context for trade planning, but the map does not predict price reactions.
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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.