OPEN-SOURCE SCRIPT

SMC Supply and Demand Zones [Dots3Red]

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SMC Supply & Demand Zones [Dots3Red]
This script automatically detects and visualizes Smart Money Concept (SMC) Supply and Demand zones using a three-factor confirmation model: base consolidation, impulse breakout, and volume surge.

How zone detection works
The indicator looks for a tight consolidation base (price range below ATR threshold) followed by a strong impulsive candle breaking out of that base with above-average volume. The direction of the breakout determines the zone type — bullish breakout creates a Demand zone, bearish breakout creates a Supply zone. The base range itself becomes the zone, as that is where institutional activity occurred.

Zone scoring (max 5)
Each zone is scored at birth based on three factors:
  • Base tightness — how compressed the consolidation was (1pt)
  • Impulse strength — how strong the breakout candle body was relative to ATR (2pts)
  • Volume confirmation — whether breakout volume exceeded the MA threshold (2pts)

Higher scoring zones render with stronger fill intensity.

Visual features
  • Supply and Demand zones themselves
  • Inactive zones (invalidated or max touches reached) can be shown or hidden via toggle

Proximity dashboard
A live table in the top-right corner shows all active zones ranked by distance from current price. Each zone displays its type, score, distance in ATR units, and status — INSIDE (gold), NEAR (orange), or AWAY (gray).

Zone invalidation
A zone is considered broken when price closes through it (configurable to wick-based) or when it has been touched too many times — both signals that the institutional order block has been absorbed.

Settings
All key parameters are tunable — base length, ATR multipliers, volume sensitivity, touch limits, score threshold, and proximity distance — making the indicator adaptable to any instrument and timeframe.

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