Voodoo Levels are a model for defining price action within defined ranges and their associated expansion levels. Levels detect volatility over a static timeframe and its associated expansion zone based off Fibonacci sequencing. This offers the user static levels at the opening price of the chosen timeframe. Paired with price action strategies, dynamic support and resistance, or order blocks this can be an extremely powerful trading system.
💎 Where to Use
Voodoo Levels work best on anything with high volume in the futures, metals, and crypto markets. Notably ES/NQ/GC/BTC/ETH/TSLA. Voodoo Levels can work on any timeframe and can help gauge where the market is headed and when it might bounce. It's my belief that the market is driven off algorithms that similarly calculate these ranges, thus these levels often look "magical." Once you see interactions with these levels and asset respecting this model you cannot unsee it.
💎 How to Use
The model has a neutral zone or "mean" at the open. Expansion levels exist for category 1, 2 and 3 interactions in each direction (High = H, Low = L, Example: DH1). Using a methodology similar to smart money concepts, H2 and H3 zones might be considered a premium zone while L2 and L3 zones might be considered a discount zone. I've been careful with this system not to draw too many levels and fall into the "draw enough lines and one will stick" trap. There are hidden levels in between each key level that you can find using a 0.5 fib retracement tool meaning the midpoint of H2 and H3 might often be a critical resistance zone for an asset.
The default mode ("Auto" timeframe in indicator settings) will make an assumption on which levels are most interesting based on your current chart timeframe. Low timeframe charts will show daily levels and as you increase timeframes to daily or weekly timeframes the levels will expand to longer ranges. [I]My favorite timeframe is to utilize the daily levels.[/I] You can choose a static timeframe in settings if you prefer.
I often look for H1/L1 entries within trend and then H2/L2 entries as a potential reversal. H3/L3 is often the max extension you will see on a trend day. I consider every zone as a potential take profit on an active trade an manage trades within this model.
Depending on volatility and ticker, different levels will be magnets and potential reversal zones. Sometimes a certain market is driving towards a key level, for example NQ will often push towards a L3 target while ES might be pushing towards the L2 target. This is normal because tech is often a more important catalyst.
Hi - I am enjoying the Voodoo indicator. Can you make a version that allows you to pick the Open Baseline? I would like to see how the lines change using midnight EST as the Open Baseline vs the 6pm EST market open time?
adithvellai
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Please add 4H also
Tencog
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Thanks for the fantastic indicator! Question - do you use a specific look back period to generate the lines?
trw-capital
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Would be great to see this without the lines being connected between one time frame to the next
upslidedown
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@trw-capital, this is a most excellent idea for cleaning up a chart. While there are limitations in what one can do with pine script plots this is an addition I most certainly will add in an updated release that I'm preparing (and in fact have already implemented on my dev version).
bigbang74
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Hi, thanks for the script; this script reminds me a modified version of Average Daily Range Zone indicator. Levels 2 are the same values but i loved the level 1 and 3 idea :) if possible, adding a button for hide/show past levels and adding a 6 Month(Semi Annual) timeframe would be great