OPEN-SOURCE SCRIPT
Auto Supply & Demand Zones [Proozac]
# Auto Supply & Demand Zones
**Pine Script v6 — Overlay Indicator**
---
## What It Does
Automatically identifies and draws **Supply** and **Demand** zones using a consolidation-then-impulse approach. Instead of drawing arbitrary rectangles around wicks or candles, this indicator marks the precise origin of impulsive moves — the base where institutions accumulated or distributed positions before the explosive move began.
Zones update dynamically: they extend to the current bar as long as they are active, fade when price re-enters them (tested), and can be removed automatically when fully mitigated.
---
## Core Concept
Supply and Demand zones are based on the observation that before a strong directional move, price always consolidates in a narrow range. This consolidation is where orders were placed. When price eventually returns to that origin area, those resting orders become relevant again.
```
DEMAND ZONE (base before impulsive UP move)
────────────────────────────────────
[consolidation base] ← zone drawn here
↑↑↑↑↑↑↑↑↑↑↑↑↑↑↑↑↑ ← impulsive bullish candle
SUPPLY ZONE (base before impulsive DOWN move)
↓↓↓↓↓↓↓↓↓↓↓↓↓↓↓↓↓ ← impulsive bearish candle
[consolidation base] ← zone drawn here
────────────────────────────────────
```
---
## Detection Logic
### Step 1 — Identify the Base (Consolidation)
A "base" is a sequence of `Consolidation Bars` consecutive candles where every candle body is **smaller than the ATR**:
```
For each candle in the base window:
body = |close - open|
if body > ATR → not a base
```
This filters out directional candles and keeps only tight, sideways price action — the footprint of institutional accumulation/distribution.
### Step 2 — Detect the Impulse
An impulse candle is a strong directional candle **immediately after** the base:
```
Bullish impulse: base confirmed AND close > open AND (close - open) > ATR × Impulse Strength
Bearish impulse: base confirmed AND close < open AND (open - close) > ATR × Impulse Strength
```
The `Impulse Strength` multiplier controls how strong the breakout candle must be relative to ATR. At 1.5× ATR, only genuinely strong moves qualify.
### Step 3 — Draw the Zone
The zone is drawn over the **range of the consolidation base** (highest high to lowest low across all base candles):
```
Zone top = max(high) across base candles
Zone bottom = min(low) across base candles
```
- Bullish impulse → **Demand zone** (green box)
- Bearish impulse → **Supply zone** (red box)
---
## Zone Lifecycle
| State | Visual | Condition |
|-------|--------|-----------|
| **Active** | Full color, solid border | Price has not returned to the zone |
| **Tested** | Price is currently inside the zone | Background flashes, border highlights |
| **Mitigated** | Faded to high transparency | Price closed through the zone's far edge |
| **Deleted** | Removed from chart | Only if "Keep Tested Zones" is off |
Zone mitigation rules:
- Demand zone → mitigated when `low < zone bottom` (price broke below it)
- Supply zone → mitigated when `high > zone top` (price broke above it)
---
## Inputs
| Input | Default | Description |
|-------|---------|-------------|
| **Consolidation Bars** | 3 | Number of tight candles required to form a base. More bars = stricter, rarer zones |
| **Impulse Strength (×ATR)** | 1.5 | How strong the breakout candle must be vs ATR. Higher = stronger impulses only |
| **ATR Length** | 14 | Period for the ATR used in base and impulse detection |
| **Max Active Zones** | 10 | Maximum number of zones kept per side (oldest removed first) |
| **Demand Zone Color** | Teal/green | Fill color for demand zones |
| **Supply Zone Color** | Red | Fill color for supply zones |
| **Demand/Supply Border** | Darker tint | Border color |
| **Tested Zone Transparency** | 92 | Opacity of mitigated zones (higher = more transparent) |
| **Show Zone Labels** | true | Draws "Demand" / "Supply" text inside each box |
| **Keep Tested Zones (Faded)** | true | When off, mitigated zones are deleted entirely |
---
## Visual Output
| Element | Description |
|---------|-------------|
| Green box | Active demand zone (base of a bullish impulse) |
| Red box | Active supply zone (base of a bearish impulse) |
| Faded green box | Demand zone that has been mitigated |
| Faded red box | Supply zone that has been mitigated |
| Green triangle below bar | New demand zone created this bar |
| Red triangle above bar | New supply zone created this bar |
| Green background flash | Price is currently inside a demand zone |
| Red background flash | Price is currently inside a supply zone |
---
## How to Use
**Basic trade setup:**
1. Wait for price to return to an active zone.
2. Look for a confirmation signal inside the zone — a rejection candle, a sweep of the zone's inner extreme, or a divergence from an oscillator.
3. Enter with a stop beyond the zone's outer edge.
4. Target the next supply zone (from demand) or next demand zone (from supply).
**Confluence checklist:**
- Zone is fresh (not previously tested)
- Zone aligns with a higher timeframe level
- MTF Dashboard (indicator 02) shows agreement on the entry direction
- A Liquidity Sweep (indicator 03) fired near the zone entry
**Zone freshness matters:** The first time price returns to a zone, the fill rate is significantly higher than on second or third tests. After a zone is mitigated, treat it as much weaker.
---
## Configuration Tips
| Scenario | Suggested settings |
|----------|--------------------|
| Clean, infrequent zones | Consolidation: 4–5, Impulse: 2.0× |
| More zones, active markets | Consolidation: 2, Impulse: 1.2× |
| Crypto (volatile, wide spreads) | ATR: 20, Impulse: 2.0–2.5× |
| Forex (tight spreads) | ATR: 14, Impulse: 1.5× |
| Equities / indices | ATR: 14, Impulse: 1.5–2.0× |
---
## Alerts
Two built-in `alertcondition` entries:
- `Price in Demand Zone` — fires on every bar where close is inside an active demand zone
- `Price in Supply Zone` — fires on every bar where close is inside an active supply zone
Recommended alert settings: **Once per bar close** to avoid repeated triggers within the same bar.
**Pine Script v6 — Overlay Indicator**
---
## What It Does
Automatically identifies and draws **Supply** and **Demand** zones using a consolidation-then-impulse approach. Instead of drawing arbitrary rectangles around wicks or candles, this indicator marks the precise origin of impulsive moves — the base where institutions accumulated or distributed positions before the explosive move began.
Zones update dynamically: they extend to the current bar as long as they are active, fade when price re-enters them (tested), and can be removed automatically when fully mitigated.
---
## Core Concept
Supply and Demand zones are based on the observation that before a strong directional move, price always consolidates in a narrow range. This consolidation is where orders were placed. When price eventually returns to that origin area, those resting orders become relevant again.
```
DEMAND ZONE (base before impulsive UP move)
────────────────────────────────────
[consolidation base] ← zone drawn here
↑↑↑↑↑↑↑↑↑↑↑↑↑↑↑↑↑ ← impulsive bullish candle
SUPPLY ZONE (base before impulsive DOWN move)
↓↓↓↓↓↓↓↓↓↓↓↓↓↓↓↓↓ ← impulsive bearish candle
[consolidation base] ← zone drawn here
────────────────────────────────────
```
---
## Detection Logic
### Step 1 — Identify the Base (Consolidation)
A "base" is a sequence of `Consolidation Bars` consecutive candles where every candle body is **smaller than the ATR**:
```
For each candle in the base window:
body = |close - open|
if body > ATR → not a base
```
This filters out directional candles and keeps only tight, sideways price action — the footprint of institutional accumulation/distribution.
### Step 2 — Detect the Impulse
An impulse candle is a strong directional candle **immediately after** the base:
```
Bullish impulse: base confirmed AND close > open AND (close - open) > ATR × Impulse Strength
Bearish impulse: base confirmed AND close < open AND (open - close) > ATR × Impulse Strength
```
The `Impulse Strength` multiplier controls how strong the breakout candle must be relative to ATR. At 1.5× ATR, only genuinely strong moves qualify.
### Step 3 — Draw the Zone
The zone is drawn over the **range of the consolidation base** (highest high to lowest low across all base candles):
```
Zone top = max(high) across base candles
Zone bottom = min(low) across base candles
```
- Bullish impulse → **Demand zone** (green box)
- Bearish impulse → **Supply zone** (red box)
---
## Zone Lifecycle
| State | Visual | Condition |
|-------|--------|-----------|
| **Active** | Full color, solid border | Price has not returned to the zone |
| **Tested** | Price is currently inside the zone | Background flashes, border highlights |
| **Mitigated** | Faded to high transparency | Price closed through the zone's far edge |
| **Deleted** | Removed from chart | Only if "Keep Tested Zones" is off |
Zone mitigation rules:
- Demand zone → mitigated when `low < zone bottom` (price broke below it)
- Supply zone → mitigated when `high > zone top` (price broke above it)
---
## Inputs
| Input | Default | Description |
|-------|---------|-------------|
| **Consolidation Bars** | 3 | Number of tight candles required to form a base. More bars = stricter, rarer zones |
| **Impulse Strength (×ATR)** | 1.5 | How strong the breakout candle must be vs ATR. Higher = stronger impulses only |
| **ATR Length** | 14 | Period for the ATR used in base and impulse detection |
| **Max Active Zones** | 10 | Maximum number of zones kept per side (oldest removed first) |
| **Demand Zone Color** | Teal/green | Fill color for demand zones |
| **Supply Zone Color** | Red | Fill color for supply zones |
| **Demand/Supply Border** | Darker tint | Border color |
| **Tested Zone Transparency** | 92 | Opacity of mitigated zones (higher = more transparent) |
| **Show Zone Labels** | true | Draws "Demand" / "Supply" text inside each box |
| **Keep Tested Zones (Faded)** | true | When off, mitigated zones are deleted entirely |
---
## Visual Output
| Element | Description |
|---------|-------------|
| Green box | Active demand zone (base of a bullish impulse) |
| Red box | Active supply zone (base of a bearish impulse) |
| Faded green box | Demand zone that has been mitigated |
| Faded red box | Supply zone that has been mitigated |
| Green triangle below bar | New demand zone created this bar |
| Red triangle above bar | New supply zone created this bar |
| Green background flash | Price is currently inside a demand zone |
| Red background flash | Price is currently inside a supply zone |
---
## How to Use
**Basic trade setup:**
1. Wait for price to return to an active zone.
2. Look for a confirmation signal inside the zone — a rejection candle, a sweep of the zone's inner extreme, or a divergence from an oscillator.
3. Enter with a stop beyond the zone's outer edge.
4. Target the next supply zone (from demand) or next demand zone (from supply).
**Confluence checklist:**
- Zone is fresh (not previously tested)
- Zone aligns with a higher timeframe level
- MTF Dashboard (indicator 02) shows agreement on the entry direction
- A Liquidity Sweep (indicator 03) fired near the zone entry
**Zone freshness matters:** The first time price returns to a zone, the fill rate is significantly higher than on second or third tests. After a zone is mitigated, treat it as much weaker.
---
## Configuration Tips
| Scenario | Suggested settings |
|----------|--------------------|
| Clean, infrequent zones | Consolidation: 4–5, Impulse: 2.0× |
| More zones, active markets | Consolidation: 2, Impulse: 1.2× |
| Crypto (volatile, wide spreads) | ATR: 20, Impulse: 2.0–2.5× |
| Forex (tight spreads) | ATR: 14, Impulse: 1.5× |
| Equities / indices | ATR: 14, Impulse: 1.5–2.0× |
---
## Alerts
Two built-in `alertcondition` entries:
- `Price in Demand Zone` — fires on every bar where close is inside an active demand zone
- `Price in Supply Zone` — fires on every bar where close is inside an active supply zone
Recommended alert settings: **Once per bar close** to avoid repeated triggers within the same bar.
نص برمجي مفتوح المصدر
بروح TradingView الحقيقية، قام مبتكر هذا النص البرمجي بجعله مفتوح المصدر، بحيث يمكن للمتداولين مراجعة وظائفه والتحقق منها. شكرا للمؤلف! بينما يمكنك استخدامه مجانًا، تذكر أن إعادة نشر الكود يخضع لقواعد الموقع الخاصة بنا.
إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.
نص برمجي مفتوح المصدر
بروح TradingView الحقيقية، قام مبتكر هذا النص البرمجي بجعله مفتوح المصدر، بحيث يمكن للمتداولين مراجعة وظائفه والتحقق منها. شكرا للمؤلف! بينما يمكنك استخدامه مجانًا، تذكر أن إعادة نشر الكود يخضع لقواعد الموقع الخاصة بنا.
إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.