Wick Pressure Zones for Mapping Supply and Demand
Summary
This document describes an indicator that turns unusually long candle wicks into supply and demand zones. It measures each upper and lower wick relative to price, scales the measurement against the largest wick in a rolling window, and uses a threshold to identify standout candles. An RSI filter assigns context: upper wicks qualify as supply when RSI is above 50, while lower wicks qualify as demand when RSI is below 50. A spacing rule limits how often new zones appear, and the indicator keeps only a capped set of recent zones.
Zones extend as price trades and are marked broken only after a full candle clears the far boundary. The article suggests fading a zone’s first retest, trading a pullback after a clear, or favoring zones that align with other chart levels. It gives implementation details and adjustable parameters, but supplies no performance tests or evidence that these playbooks are profitable. The rules are therefore a charting framework, not a validated trading system; results may depend on market, timeframe, parameter choices, and the behavior of the wick and RSI signals.
Key ideas
- Wick size is normalized against the largest recent wick to compare pressure across price levels and chart contexts.
- An upper-wick zone requires a threshold score, no simultaneous qualifying lower wick, and RSI above 50; lower zones use the opposite RSI condition.
- A minimum bar spacing and cap on stored zones reduce clustering and chart clutter.
- A zone is invalidated only when a later candle trades entirely beyond its outer boundary.
- Retest fades and post-break pullbacks are proposed playbooks, but the document offers no performance validation.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.