Justified Price Zone

1. What is this indicator?

Introduction: 

The Justified Price Zone Indicator is a trading tool that identifies key supply and demand zones using volume and volatility data, helping traders spot potential market reversals. It clearly displays these zones on charts, enhancing decision-making for both bullish and bearish trades.

Benefits:

• Enhanced Accuracy: Utilizes volume and volatility data to accurately identify key supply and demand zones where market reversals are likely.
• Advanced Analytics: Integrates complex algorithms to detect justified trading zones, offering deeper market insights.
• Visual Clarity: Clearly displays supply and demand zones on charts, with color coding to indicate zone strength, improving visual analysis.
• Customizable Alerts: Provides configurable alerts for bullish and bearish signals, ensuring traders don't miss potential trading opportunities.
• Versatile Use: Suitable for various markets and timeframes, enhancing its utility for different trading strategies.

2.   Indicator settings

• Basic settings

Lookback period: Defines the number of bars the indicator reviews to determine normal and abnormal volume and price activity.

MA period for volume normalization: Sets the period over which the moving average is calculated for normalizing volume data.

• Volume and Price Settings

Volume spike level: Determines the threshold for what constitutes a volume spike, often set above 150% of normal volume.

Candle body coefficient: The factor by which the candle body must exceed the ATR to be considered significant, typically 1.5 times.

ATR period: Specifies the number of bars used to calculate the Average True Range, influencing volatility assessments.

• Zone Visualization

Zone merge: Allows adjacent zones that meet certain criteria to merge into a single zone.

Show zone weak: Toggles the display of weak zones on the chart.

Show zone turncoat: Enables the visualization of zones that have failed to hold as either support or resistance.

• Color Coding

Color Support Weak: Color for weak support zones.

Color Support Verified: Color for verified support zones.

Color Support Proven: Color for proven support zones.

Color Support Turncoat: Color for failed support zones (turncoat).

Color Resist Weak: Color for weak resistance zones.

Color Resist Proven: Color for proven resistance zones.

Color Resist Turncoat: Color for failed resistance zones (turncoat).

• Signal Settings

Bullish Signal Text: Custom text displayed for bullish signals.

Bearish Signal Text: Custom text displayed for bearish signals.

Bullish Signal on Chart Color: Color used for bullish signal text on the chart.

Bearish Signal on Chart Color: Color used for bearish signal text on the chart.

Show Signals for Latest Pattern Crossing Only: Limits signal displays to only those occurring after the most recent pattern recognition.

• Trade Management

Stop Loss Line Color: Color for the line indicating where to place a stop loss.

Take Profit Line Color: Color for the line indicating where to place a take profit.

Allow Draw SL and TP Labels: Toggles whether labels for stop loss and take profit should be displayed.

Stop Loss Label Color: Color for the stop loss label.

Take Profit Label Color: Color for the take profit label.

• Advanced Trade Settings

SL Detection Distance (Days): Defines how many days back to consider when setting a stop loss.

ATR Period for SL Shift: Sets the period over which the ATR is calculated for adjusting the stop loss.

SL Shift Coefficient (from ATR): Determines how much the stop loss should be adjusted based on the ATR.

TP Coefficient (from SL): Sets the factor by which the take profit is calculated from the stop loss setting.

3.  Alert set-up:

To stay updated on potential trading opportunities, you can set up alerts within the Justified Price Zone indicator settings.

Step 1: From the indicator settings, customize your alerts by defining your desired parameters for buy and sell signals. The selected configurations will be used for notifications in Step 2.

Step 2: To receive notifications through the app, pop-ups, alert emails, Webhook URL, sound alerts, or email-to-SMS, enable these features by clicking on TradingView's Alert icon.

Step 3: Select Justified Price Zone from the “Condition” dropdown list

Step 4: A pop-up will appear as follows. Click on “Notification”.

Step 5: Choose the types of notifications you'd like to receive, and click the “Create” button.