Index Kill Zones - SMC Indicators

24 de jan.

What are Index Kill Zones?

Index Kill Zones are specific Time Windows of opportunity during the Session for Indices that have the potential for the highest volatility and where looking for trading opportunities is ideal.

The Index Kill Zone Indicator is specifically designed for the SP500, NQ100, and DJ30, Markets. What differentiates this script from other Kill Zones scripts is that this script is based on NY Midnight as the basis for the start of the day.

This is not the usual below-average Index Kill Zone indicator because this indicator does not only show the 3 main Kill Zones or Sessions, but it also offers extra Kill Zones within each session that are called "AM Session", "PM Session", the "Launch Hour", the "Silver Bullet for the London, AM, and PM Sessions", and the "Last Hour" for the London, AM, and PM sessions.

Another key differentiator of this indicator's functionality is that it shows the highs and lows of each Kill zone allowing SMC traders to monitor Time-Based Liquidity above the highs and lows of each trading session.

By splitting each trading day into AM and PM Sessions, we can identify 3 types of potential daily profiles. These daily profiles could be used as conceptual templates as to what to expect from the price during a certain day. The 6 templates are the following:

1. Two Sessions Up: Where the price would go in one direction higher during both the AM and PM Sessions.

2. Two Sessions Down: Where the price would go in one direction lower during both the AM and PM Sessions.

3. AM Rally, then PM Decline: The price would go higher during the AM session and then lower during the PM Session.

4. AM Decline, then PM Rally: The price would go lower during the AM session and then higher during the PM Session.

5. Consolidation, AM Rally, then PM Decline: Where the price would consolidate most of the AM Session, then go higher into the last hour, and then reverse and go lower during the PM Session.

5. Consolidation, AM Decline, then PM Rally: Where the price would consolidate most of the AM Session, then go lower into the last hour, and then reverse and go higher during the PM Session.

Within each AM and PM Session, there is a "Silver Bullet" that acts as a time window of opportunity to get into a continuation trade in the direction of the prevailing trend.

Also, within each AM and PM Session, there is a "Last Hour" that acts as a time window of opportunity to get into a trade in the direction of the potential trend if the price has not moved yet, or as a reversal trade opportunity if the price has already ran previous short-term highs or lows.

Finally, we have also incorporated a Notification function to remind the trader of the start of the trading Kill Zones to not miss out on potential trade opportunities.

Key Functionalities

Universal Time Reference

Every day starts at 00:00 NY Midnight, irrespective of the trader's local time, Instead of the Standard GMT Midnight. This allows all Index Kill Zones to be in line with the New York start of the day at Midnight, as taught by ICT.


Weekend Highlighter

This feature highlights time from Sunday Market Open at 5 PM NY Time to 00:00 NY Midnight.

It's useful for identifying the non-trading or the low volatility periods when trading should be avoided.

https://www.tradingview.com/x/SFv7IXjq/


Features Breakdown

Lookback Period

• Defaulted to 60 trading days, aligning with “IPDA Data Ranges”, which is ideal for backtesting.
  
• It's adjustable for trading, and it's recommended to keep it at 20 trading days to focus on the most recent data only.
  

24-hour Daily Intervals

• The 24-hour intervals are not the same as the usual daily candle. Instead, the start of each trading day is anchored to the 00:00 NY Midnight.
  
• Highlights "Days of the Week" labels, "Weekend" Trading Time, and the daily high-low ranges based on the start of trading day mark being at 00:00 NY Midnight.
  

London Kill Zones (Green)

• The Full London Session starts from 02:00 NY Time to 05:00 NY Time.
  
• London Silver Bullet starts from 03:00 NY Time to 04:00 NY Time.
  
• London Last Hour starts from 04:00 NY Time to 05:00 NY Time.
  
• Highlights the high and low of the London Kill Zone to Identify Time-Based Liquidity above and below the London Kill Zone Range.
  

https://www.tradingview.com/x/VCR0Famm/


AM Session Kill Zone (Blue)

• The full AM Session Starts from 09:30 NY time to 12:00 NY Time.
  
• AM Session Silver Bullet starts from 10:00 NY Time to 11:00 NY Time.
  
• AM Session Last Hour starts from 11:00 NY Time to 12:00 NY Time.
  
• Highlight the high and low of the AM Session to Identify Time-Based Liquidity above and below the AM Session Range.
  

Highlights the time when there is the highest volatility during the AM Session.

https://www.tradingview.com/x/Z2gB1L2s/


PM Session Kill Zone (Orange)

• The full PM Session Starts from 13:00 NY time to 16:00 NY Time.
  
• PM Session Silver Bullet starts from 14:00 NY Time to 15:00 NY Time.
  
• PM Session Last Hour starts from 15:00 NY Time to 16:00 NY Time.
  
• Highlight the high and low of the PM Session to Identify Time-Based Liquidity above and below the PM Session Range.
  

Highlights the time when there is the highest volatility during the PM Session.

https://www.tradingview.com/x/setPyyGr/


Bonus Features

Daily & Weekly Open Price Levels

The Open Price levels draw a horizontal line from the start of the trading day at 00:00 NY midnight, and it extends it towards the end of the trading day.

This is useful for understanding where the price is relative to the daily candle.

• When Bullish, the trader should look for setups at or below the daily or weekly open price.
  
• When Bearish, the trader should look for setups at or above the daily or weekly open price.
  

Whether to choose the Daily or Weekly open price depends on the trader's trading style. If the trader is day trading or scaling, then it's more appropriate to choose the Daily Open Price.

However, Day Traders can also use the Weekly candle to align with the Weekly Candle's expected range direction.

On the other hand, if the trader is a Swing Trader and wants to capitalise on the weekly candle's trend, then it's more appropriate to choose the Weekly Open Price.

However, Swing Traders can also use the Daily Open Price when looking to take a trade to time better entries with a high risk-to-reward ratio.

Daily Open Price Level (in Green) and Weekly Open Price Level (in White)

https://www.tradingview.com/x/HJskKX9r/

Kill Zones Open Price Level

This is useful if the trader is an intra-session trader and wants to treat the sessions as the daily candle. In this case, the trader can use the Kill Zones Open Price levels based on the same logic of the Daily Open Price, where the trade would look for buy opportunities below the Session's open price and look for sell opportunities above the Session's Open Price Level.

https://www.tradingview.com/x/ntBt54SC/

Notifications

The trader can also receive alerts as a reminder at the start of the desired session to ensure that he or she does not miss the start of the trading session.