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06/24/2019 |

TrendSpider User Guide: Exploring Horizontal Price Heatmaps

TrendSpider is dedicated to helping our customers and users understand the platform and the different tools that we have to offer through our User Guide blog posts. In this post, we explain how our “Heatmap feature works when it draws horizontal price levels on your charts!

TrendSpider Horiztonal Price Heatmaps Explained

Step 1

Imagine that this is your chart. We’re gonna build an S/R heatmap.

TrendSpider Horiztonal Price Heatmap.

Step 2

First, we generate a grid and lay it over the chart. The grid has fixed size (40 x 60 cells), but I’ll use smaller numbers for purpose of this explanation.

TrendSpider Horiztonal Price Heatmap.

Step 3

Next, we calculate the “heat” of each cell. On a pic below, heats shown as numbers. “Heat” is equal to a number of special points which are inside of the cell.

There are two kinds of special points:

  1. Low of a red candle
  2. High of a green candle

TrendSpider Horiztonal Price Heatmap.

Step 4

Now, we wipe values for cells which have their heat being below the threshold (3, for purpose of this explanation). It’s a way for reducing noise.

TrendSpider Horiztonal Price Heatmap.

Step 5

Next, we make each special point gradually “leak” strength over time, so that the brightness of the heatmap for these points fades over time.

TrendSpider Horiztonal Price Heatmap.

Step 6

Finally, we use the strength to calculate a color and fill in the boxes on the grid with various shades of red to generate the heatmap.

TrendSpider Horiztonal Price Heatmap.

Finished Product

Horizontal Price Heatmap in TrendSpider.