Supply/Demand Zones (Synthetic SMA Candles)

Supply/Demand Zones (Synthetic SMA Candles)

Created by The_Forex_Steward

This indicator highlights institutional-style supply and demand zones using synthetic SMA-based candles rather than raw price data. It provides a smoother, more refined view of price action to help identify key imbalance areas where price is likely to react.

Features:
- Uses SMA-smoothed synthetic candles to detect bullish and bearish engulfing structures
- Draws demand zones after bullish breakouts and supply zones after bearish breakouts
- Zones are persistent for a customizable number of bars
- Mitigated zones can optionally be removed from the chart
- Includes alerts for breakout and mitigation events
- Optional plotting of synthetic candles over price for visual clarity

How It Works:
When a synthetic candle closes above the high of a previous bearish candle, a bullish engulfing is detected, and a demand zone is created from that bearish candle’s high and low. Conversely, when price closes below the low of a previous bullish candle, a supply zone is formed. These zones stay on the chart for the user-defined duration or until they are mitigated by price, at which point they can be removed automatically.

How to Use:
- Adjust the SMA Length to control how smooth the synthetic candles appear
- Enable or disable Show Supply Zones and Show Demand Zones as needed
- Set the Zone Duration to control how long each zone persists
- Use Delete Mitigated Zones to automatically remove zones when price returns to them
- Optionally enable Show Synthetic SMA Candles to see the candle logic used in detection
- Use the built-in alerts to stay notified of new zone creation or mitigation

Note: This tool is most effective when combined with structure or trend-based strategies for confirmation.

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Input adjusted

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Updated input vocabulary and alerts

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Updated engulfment logic

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Mitigation logic updated- zones are automatically dimmed when mitigated

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HTF supply/demand options added

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Logic updated for less duplicate zones and zone accuracy: dependent of smaclose.

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Zones are now fit to higher/lower candle (between sma and htf candle) for safer more accurate zones

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Dim mitigated boxes is now optional. Raw close input option added (triggers sooner).

Use SMA Close for more consistent results, use Raw Close input option for faster triggering.

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New input toggle "Delete Broken Zones". Toggle off if you want to keep old zones

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Updated zone accuracy. Supply zone highs and demand zone lows are now at true swing levels.

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Default inputs changed for effectiveness. Charted example changed for clarity.

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Bug fix (SMA candle overlay)