Volume-Confirmed Order Blocks for a Liquidity Zone Heatmap

Summary

This indicator marks bullish and bearish order-block zones using a price pattern confirmed by unusually high volume. A bullish setup occurs when the prior bar makes a lower low than the bar before it, the current close exceeds the prior high, and volume surpasses a configurable multiple of its 20-period average. The bearish setup reverses the price conditions. Each zone spans the prior bar’s high and low. Active zones extend to the latest bar; a close beyond the relevant boundary marks a zone as broken. Broken areas can be shown in gray or hidden, and optional arrows flag detection bars.

The indicator tracks a configurable maximum of five zones per direction, removing the oldest when the limit is reached. The document provides implementation details and default settings, but no backtest or evidence that the zones reflect institutional activity or predict price behavior. The rules are a technical pattern definition; their usefulness depends on market, timeframe, volume data, and evaluation method.

Key ideas

• Bullish and bearish zones are identified by reversal-like price conditions combined with elevated volume.
• Each detected zone uses the previous bar’s high and low as its boundaries.
• A close through a zone boundary marks that zone as broken.
• The indicator can retain up to five zones per direction and discard the oldest when full.
• The description provides no performance evidence for the pattern or its interpretation.

Tags

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