Microwave Volume POC Zones Lite

Microwave's Volume POC Zones Lite

This indicator draws supply/demand zone boxes around price levels that coincide with confirmed local volume spikes.
It also clusters nearby pivots into the same zone and only highlights a zone as “confirmed” after support & resistance validation.

What it plots

• Zone boxes around candidate price levels (demand or supply).
  
• Zones extend forward in time until they expire.
  
• Zone color changes after confirmation (based on touch validation rules).
  

How it works (high level)

• 1) Volume Pivot (POC candidate)
  • Scans a symmetric window of bars: leftBars + rightBars + 1
  • The center bar must be the unique maximum volume in that window (ties rejected).
  
  
• 2) Volume Spike Filter
  • Center bar volume must exceed SMA(volume, volLen) × volMult.
  
  
• 3) Demand / Supply Anchoring (wick extremes)
  • Demand zone: uses the center bar low if it is extreme vs average closes on both sides.
  • Supply zone: uses the center bar high if it is extreme vs average closes on both sides.
  
  
• 4) Zone Height
  • Zone thickness is ATR(atrLen) × zoneAtrMult.
  
  
• 5) POC Clustering
  • New pivots within pocClusterPct of an existing zone’s base price are merged into that zone, increasing its POC count.
  
  
• 6) Confirmation (Support & Resistance validation)
  • A zone becomes confirmed only when:
  - It contains at least minPocPerZone POCs, and
  - It has at least minTouches validated support touches, and
  - It has at least minTouches validated resistance touches.
  • Touch validation uses a mid-penetration → breakout exit rule with:
  - exitBars (validation time window)
  - minExitPct (minimum breakout distance)
  

Important note about plotting delay (pivot confirmation)

This script uses rightBars future bars to confirm the volume pivot.
That means zones will appear with a delay of rightBars after the actual event. This is expected and by design.

Recommended timeframe

For cleaner zones and fewer noisy pivots, 1H or higher timeframes are recommended (e.g., 1H / 2H / 4H / 1D).

How to use

• Treat zones as areas of interest (potential reaction / decision zones), not as trade signals.
  
• Combine with your own trend/structure confirmation and risk rules.
  

Disclaimer

Educational tool only. Not financial advice.