What Are Supply and Demand Zones In ThinkOrSwim

[TapthatAsk]

@MerryDay is there something that plots supply and demand zones?

On the VIP advertisement I seen one indicator that seems to act like S&D zones but I'm unsure if that's it's purpose. Looks like clouds but it's hard to tell you can just see price rejecting in those areas. What is it called and or what's its purpose?

 

[MerryDay]

Definition of Supply & Demand Zones.

The concept of Supply and Demand comes from its original use on the Commodities exchange. When the suppliers of pork bellies were scarce, it drove up demand and thus the commodity prices.
With stocks, this translates to Volume: demand is represented by buyers, while supply is represented by sellers.

This is totally different from Support and Resistance. These terms are not interchangeable. Support & Resistance lines look for probable areas of reversal based on trendlines, moving averages, bands, ranges, etc… There is no volume component in S&R indicators unlike SD Zones which are totally liquidity driven.

Now, that we have the definition: Where can we find the Supply and Demand Zones Indicator For ThinkOrSwim?
Technically, we can't. The ToS data feeds do not include buyers and sellers data; so creating a ThinkScript based on that information is not possible.

ToS has recently introduced a bookmap subscription through their order-flow module which does have this information:
https://usethinkscript.com/threads/thinkorswim-bookmap-order-flow.2406/

What workarounds are available? Other than Ninja Trader, all the trading platforms lack the necessary data to create SD Zones. The only common alternative seems to be the use of candle patterns, specifically spikes, which is generally seen as an imbalance between buyers and sellers in the market.
Read more about that here: https://the5ers.com/supply-and-demand-forex/#:~:text=reducing their demand.-,How to Identify Demand Zones on Price Charts,-To identify a
Find the Supply and Demand Candle Pattern Indicator here:
https://usethinkscript.com/threads/supply-and-demand-candles-for-thinkorswim.652/



@TapthatAsk In answer to your question: Yes, there is an Advance Market Moves VIP indicator that draws Support & Resistance lines NOT Supply & Demand Zones. We also have many types of Support & Resistance Indicators on the forum.
Here are the top 50 sorted by popularity:
https://usethinkscript.com/search/8...1&c[nodes][0]=3&c[title_only]=1&o=replies&g=1

 

[TapthatAsk]

Definition of Supply & Demand Zones.

The concept of Supply and Demand comes from its original use on the Commodities exchange. When the suppliers of pork bellies were scarce, it drove up demand and thus the commodity prices.
With stocks, this translates to Volume: demand is represented by buyers, while supply is represented by sellers.

This is totally different from Support and Resistance. These terms are not interchangeable. Support & Resistance lines look for probable areas of reversal based on trendlines, moving averages, bands, ranges, etc… There is no volume component in S&R indicators unlike SD Zones which are totally liquidity driven.

Now, that we have the definition: Where can we find the Supply and Demand Zones Indicator For ThinkOrSwim?
Technically, we can't. The ToS data feeds do not include buyers and sellers data; so creating a ThinkScript based on that information is not possible.

ToS has recently introduced a bookmap subscription through their order-flow module which does have this information:
https://usethinkscript.com/threads/thinkorswim-bookmap-order-flow.2406/

What workarounds are available? Other than Ninja Trader, all the trading platforms lack the necessary data to create SD Zones. The only common alternative seems to be the use of candle patterns, specifically spikes, which is generally seen as an imbalance between buyers and sellers in the market.
Read more about that here: https://the5ers.com/supply-and-demand-forex/#:~:text=reducing their demand.-,How to Identify Demand Zones on Price Charts,-To identify a
Find the Supply and Demand Candle Pattern Indicator here:
https://usethinkscript.com/threads/supply-and-demand-candles-for-thinkorswim.652/



@TapthatAsk In answer to your question: Yes, there is an Advance Market Moves VIP indicator that draws Support & Resistance lines NOT Supply & Demand Zones. We also have many types of Support & Resistance Indicators on the forum.
Here are the top 50 sorted by popularity:
https://usethinkscript.com/search/8...1&c[nodes][0]=3&c[title_only]=1&o=replies&g=1

Thanks for the education, had no idea supply and demand indicators couldnt be done on TOS, there's a guy on youtube who sells one so I figured it could actually be done. Not sure how legit it is though since you said it's basically impossible to do

 

[MerryDay]

Thanks for the education, had no idea supply and demand indicators couldnt be done on TOS, there's a guy on youtube who sells one so I figured it could actually be done. Not sure how legit it is though since you said it's basically impossible to do

Just because we don't have buyer and seller information doesn't mean that we can't look for the 'signs' of increase buyer / seller activity.

As mentioned in the above post, the most popular workaround seems to be the use of candle patterns to foretell whether buyers or sellers are in control or if control is changing hands. This method seems to have some success.

Most commercial vendors will send you an image of their indicator against whatever symbol, aggregation and/or tick that you request.
If you have a trade that went south and want to see if the indicator in your video would have made a difference.
Just write and ask for that ticker's chart with the date and the aggregation. Then compare what it tells you against the strategy that you used.
This will help determine if any commercial indicator that you are considering will have worth to you.

 

[rwfarrell]

Thanks for the education, had no idea supply and demand indicators couldnt be done on TOS, there's a guy on youtube who sells one so I figured it could actually be done. Not sure how legit it is though since you said it's basically impossible to do

Is the supply and demand script in the YouTube video available here on the usethinkscript page?

 

[BenTen]

@rwfarrell Check this page https://usethinkscript.com/p/best-support-resistance-indicators-for-thinkorswim/