I recently watched a video by Scott Landers which described a method by which he uses volume to determine significant areas of support / resistance on intra-day charts. His method seemed like it could be a useful tool to add to my intra-day trading strategy, so I wrote some code for it.
I recommend watching the video to get a better idea of what this ThinkScript is designed to do. The short version is that volume is an important indicator of market sentimentality and may be used as a tool to determine potential areas of support and resistance.
The trading day is divided into three sessions: morning (0930 – 1100), mid-day (1100 – 1400), and afternoon (1400 – 1600). The highest 5-minute volume in each session defines the greatest area of market interest and will show areas of significant support / resistance.
This indicator will work on 5 minute charts or below. The green boxes show the major areas from the morning session; gray boxes are from the mid-day session; and yellow boxes are from the late-afternoon session. The gray lines show the major support / resistance areas from the previous day.
The session colors may be adjusted from within the “Globals” section of the script settings panel.
The extension lines showing the areas of support / resistance from the prior day’s trading session may be enabled or disabled from within the script settings pane as well.
Update 07 July 2021
The Vbox indicator was, originally, written to show significant price levels based on 5 minute volume. It has been updated to allow for other volume time-periods to be used.