Simulated Liquidity Zone Heatmap (SLZH) v5 (Stable)

# 📈 Simulated Liquidity Zone Heatmap (SLZH) v5 - Order Flow Proxy & Adaptive VWAP

## 💡 Overview

The **Simulated Liquidity Zone Heatmap (SLZH)** is an advanced, stable Pine Script indicator designed to give traders an edge by visualizing **structural market liquidity** and **institutional order flow**. It acts as a powerful proxy for structural zones (like average cost basis) that are often missed by traditional technical analysis.

SLZH achieves this by combining two highly effective components:

1. **Volume-Based Liquidity Zones (VBLZ):** A dynamic, adaptive heatmap based on **Volume-Weighted Average Price (VWAP)** and Standard Deviation.
2. **Order Block (OB) Signals:** Stable, high-conviction signals marking the origin of strong impulsive moves.

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## 📊 Key Features & Interpretation

### 1. Volume-Based Liquidity Zones (VBLZ) - The Adaptive Heatmap

The VBLZ dynamically paints a three-tiered support/resistance system, representing the market's average cost basis and conviction. This is primarily used as a **mean-reversion tool**.

| Component | Interpretation | Trading Action |
| :--- | :--- | :--- |
| **VWAP Center** (White Line) | The **Center of Liquidity**. Price is often attracted back to this line. | Use as a **Primary Target** when trading from the outer zones. |
| **Strong VBLZ** (Darkest Color) | **Highest Volume Concentration** (1 StdDev). Primary structural support/resistance. | Look for **Reversals** when price enters this zone. |
| **Mid/Weak VBLZ** (Lighter Colors) | Secondary areas of interest. | Use as **Secondary Targets** or to confirm an extended move. |

### 2. Order Block (OB) Signals - Structural Support/Resistance

The OB signals mark the last counter-trend candle before a strong, sustained move, indicating a potential institutional supply or demand zone. These are displayed as stable triangles on the chart.

* **Bullish OB** (Green Triangle Up): Marks a potential **Demand Zone**. Look for high-probability **long entries** when price returns to the area of this signal.
* **Bearish OB** (Red Triangle Down): Marks a potential **Supply Zone**. Look for high-probability **short entries** when price returns to the area of this signal.

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## 🎯 High-Conviction Trading Strategy

The most effective way to use SLZH is to look for **confluence** between the dynamic VBLZ and the static OB signals. This combination creates the highest probability trade setups.

| Trade Setup | VBLZ Condition | OB Signal Condition | Action | Rationale |
| :--- | :--- | :--- | :--- | :--- |
| **High-Conviction Long** | Price is near or entering the **Strong VBLZ** from above. | A **Bullish OB Signal** is present in the same area. | **Enter Long** | Strong alignment between the market's average cost basis (VBLZ) and a structural demand zone (OB). |
| **High-Conviction Short** | Price is near or entering the **Strong VBLZ** from below. | A **Bearish OB Signal** is present in the same area. | **Enter Short** | Strong alignment between the market's average cost basis (VBLZ) and a structural supply zone (OB). |

### Setting Up Alerts

The script is equipped with three critical alert conditions for automated monitoring:

1. **Price in Strong VBLZ:** Notifies you when price enters the highest conviction heatmap zone.
2. **Bullish OB Signal:** Notifies you when a new Demand Zone is established.
3. **Bearish OB Signal:** Notifies you when a new Supply Zone is established.

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## ⚙️ Customization (Inputs)

Adjust the indicator's sensitivity via the settings menu:

* **VBLZ Lookback Length:** Controls the recency of the heatmap calculation. **Higher values** create a smoother, longer-term zone.
* **OB Min Price Move (ATR Multiplier):** Filters the Order Blocks. **Increase this value** to show only the highest-conviction zones that led to the most powerful price moves.

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**Note on Stability:** This is **v5**, a highly stable version optimized to avoid common Pine Script runtime errors. It uses stable `plotshape` signals instead of persistent boxes for the Order Blocks to ensure reliable performance on all charts.