IQ Zones [TradingIQ]

10월 31일

Hey Traders!

Introducing "IQ Zones".

"IQ Zones" is an indicator that combines support and resistance identification with volume, the "value area" of a candlestick to be exact. IQ Zones identifies turning points in the market; however, the candlestick high or low that formed the key turning point is not necessarily distinguished as the support/resistance area. Instead, the script looks into the bar at lower timeframes and calculates the value area of the candlestick that formed the support or resistance level. Therefore, any lines protruding from a candlestick reflect the value area of that candlestick. These levels (value area high and value area low) are marked on the candlestick as a support/resistance level. If the level formed on high volume it's marked as an "IQ Zone".

Additionally, IQ Zones presents a heat map to show volume intensity at nearby price areas. The heatmap is a product of the Volume Profile (IQ Profile) located on the right of the chart.

The IQ Profile is a segmented volume profile. Recent price is split into fifths (customizable), and individual volume profiles are calculated for all segmented price areas. Price is split into more than one segment to avoid a situation where volume in a ranging price zone far surpasses all other recent price areas - creating an "unusable" volume profile that doesn't offer helpful insights. If desired, you can set the segmenting option to "1" to calculate one unified volume profile for the entire price range.



The image above shows IQ Zones in action!

Core Features of IQ Zones

• Value Area Support and Resistance Levels
  
• Segmented volume profile for the recent trading period
  
• Volume intensity heatmap
  
• Support and resistance levels in high volume intensity may be more significant as price stoppers
  

The image above explains the labels marked along the y-axis of the IQ Profile.

The "more green" a price area/label is, the higher the volume intensity at the marked support/resistance area.



The image above further explains line lines protruding from the IQ Profile.

For this example, the value area of the candlestick (where most trading action occurred) is quite far from the high price of the candlestick that formed a resistance level! Using the value area of a candlestick that marks a key turning point to draw support/resistance offers insight into where the majority of trading action took place when the support/resistance level was forming!

Additionally, you can hover your mouse over the IQ Zone labels (triangles pointing up or down) to see the prices of the value area for the support/resistance level, including the total buying volume and total selling volume at the price area!



The image above further explains the IQ Profile!

You can segment the recent price area anywhere from 1 - 15 times.



The image above further explains IQ Zones and the IQ Profile!

That will be all for this indicator - a fun project to share with the community.

Thank you!