DTFX Algo Zones [LuxAlgo]DTFX Algo Zones are auto-generated Fibonacci Retracements based on market structure shifts.
These retracement levels are intended to be used as support and resistance levels to look for price to bounce off of to confirm direction.
🔶 USAGE
Due to the retracement levels only being generated from identified market structure shifts, the retracements are confined to only draw from areas considered more important due to the technical Break of Structure (BOS) or Change of Character (CHoCH).
The simple action that causes a market structure shift occurs is price breaking above or below a specific swing point. When a market structure shift happens, a retracement is drawn from the point of break to the highest or lowest point since that point. Due to the price action necessary for a market structure shift, these retracements will not always be immediately actionable.
These retracement levels are intended to be used as points to watch for price to retrace to and bounce from, confirming the current direction of price.
In the example below, after the retracement is initiated, by bouncing off of the retracement levels formed from the previous market structure shift it would further confirm the bias of the market structure shift. A break going through these levels would display a weakness from the current market structure shift, implying that it could simply be noise.
🔶 DETAILS
The script uses standard SMC Market structure identification to determine Break of Structures (BOS) and Change of Characters (CHoCH). The specific swing points can be identified by the shapes placed above or below the specific swing high/low candle.
By unchecking the "Display All Zones" setting, users are able to specify the exact number of retracement zones to display using the "Show Last" parameter. This is handy for cleaning up the chart to stay focused on the most recent retracements.
Additionally, when displaying multiple zones, the "Clean-Up Level Overlap" setting may be helpful for decluttering as well. This option optimizes the display of retracement levels to minimize their overlap on other adjacent zones.
The script allows for up to 5 Fib levels to be displayed from each zone, with options for display, value, line style, and color for each of the 5.
The calculation for Fib Levels changes depending on the direction of market structure shifts. When an upwards (Bullish) zone is generated, the retracement is drawn with the bottom of the zone being 0 and the top of the zone being 1. This is reversed for downwards (Bearish) zones.
🔶 SETTINGS
Structure Length: Sets the SMC structure length to use for finding MMS.
Show Last: Displays this number of retracement zones. (Display All Zones Must be Unchecked)
Display All Zones: Ignores "Show Last" number and displays all historical MMS Retracement Zones.
Zone Display: Choose which zones to display, only bearish, only bullish, or both.
Clean-Up Level Overlap: Minimizes overlap between adjacent zones and levels.
Fib Levels: Settings to display and customize up to 5 Fib levels for each zone.
DTFX
Protected Highs & Lows [TFO]This indicator presents an alternative approach to identify Market Structure. The logic used is derived from learning material created by @DaveTeaches
When quantifying Market Structure, it is common to use fractal highs and lows to identify "significant" swing pivots. When price closes through these pivots, we may identify a Market Structure Shift (MSS) for reversals or a Break of Structure (BOS) for continuations. The main difference with this "protected" logic is in how we determine the pivots/levels that are utilized to determine a valid MSS or BOS.
Nonetheless, the significance of our swing pivots is still governed by the input Pivot Strength parameter, which requires valid swing pivots to be compared to this many bars to the left and right of them. This is an optional parameter as it is traditionally set to 1 by default.
When identifying a BOS: When price closes below a valid swing low, we look back from the current bar to find the highest high that was made in that range. This becomes our protected high; similarly, when price closes above a valid swing high, we look back from the current bar to find the lowest low that was made in that range, which then becomes our protected low.
Note these valid highs and lows are the first swing pivots created after a MSS/BOS. For example, when price makes a bullish BOS/MSS and then trades away, a swing high is formed. This first swing high is what needs to be traded through to see a valid BOS.
When identifying a MSS: If the current trend is bearish and we're looking for a bullish reversal, we would need price to close above the most recent protected high. When this happens, we still look back to find the lowest low that was created in that range, and make that our new protected low. Likewise when looking for a bearish reversal, price would need to close below the most recent protected low, which would then give us a new protected high as a result (the highest point in that range).
The Trend Candles option allows users to easily visualize the current state of Market Structure with bullish and bearish colors. Users may also show BOS and MSS labels if desired.
Show Protected Highs & Lows will annotate the protected highs and lows, just note that the labels themselves are plotted in the past due to the lookback function required to identify them.
Lastly, the Show Protected Trail option will draw a line to essentially indicate a trailing stop-like line to denote the most recent protected low (if bullish) or protected high (if bearish).
I am simply a student of Dave's concepts, so please feel free to leave feedback if you are familiar with his concepts and have suggestions/improvements.
