OPEN-SOURCE SCRIPT
RSI Based Automatic Supply and Demand
Updated
A script that draws supply and demand zones based on the RSI indicator. For example if RSI is under 30 a supply zone is drawn on the chart and extended for as long as there isn't a new crossunder 30. Same goes for above 70. The threshold which by default is set to 30, which means 30 is added to 0 and subtracted from 100 to give us the classic 30/70 threshold on RSI, can be set in the indicator settings.
By only plotting the Demand Below Supply Above indicator you get automatic SD level that is updated every time RSI reaches either 30 or 70. If you plot the Resistance Zone / Support Zone you get an indicator that extends the zone instead of overwrite the earlier zone. Due to the zone being extended the chart can get a bit messy if there isn't a clear range going on.
There is also a "confirmation bars" setting where you can tell the script how many bars under over 30 / 70 you want before a zone is drawn.
Here is an image of only using the "Demand Below / Supply Above" plot.
As you can see, this could be useful "Price Flow" indicator, where we would only short if a zone appears below another zone, or long if two zones in a row are going up, like stairs.
By only plotting the Demand Below Supply Above indicator you get automatic SD level that is updated every time RSI reaches either 30 or 70. If you plot the Resistance Zone / Support Zone you get an indicator that extends the zone instead of overwrite the earlier zone. Due to the zone being extended the chart can get a bit messy if there isn't a clear range going on.
There is also a "confirmation bars" setting where you can tell the script how many bars under over 30 / 70 you want before a zone is drawn.
Here is an image of only using the "Demand Below / Supply Above" plot.
As you can see, this could be useful "Price Flow" indicator, where we would only short if a zone appears below another zone, or long if two zones in a row are going up, like stairs.
Release Notes
Here is a new version of this script thanks to Lij_MC who updated the script to v4 and added a bunch of settings. "... I've updated the script for you with more Zones Based on Different RSI levels and was hoping you could publish it as I know that there are many in the community that would love to use it" - Lij_MC
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
Disclaimer
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