Heatmaps are a visual representation of possible “support” and “resistance” (S/R) areas that work by shading your chart with various hues of red. Heatmaps can be used to confirm or identify levels of interest on any chart on any timeframe using these chart visuals. Areas, where multiple S/R levels clustering have been detected, will be illustrated in a brighter red (strong potential support/resistance); while areas, where there was little confluence, will not be shaded (or lightly shaded) to highlight the most likely path of least resistance for price to travel. Heatmaps are used by traders as a point of confirmation or to identify areas that have strong S/R levels which may be overlooked by manual methods of charting.
The Heatmap area which is illustrated on the chart is a range that is determined by analyzing the price action in between the two “Truth in Analysis” lines. This is similar to how other automated analysis features in TrendSpider work. This is the analysis range. It is displayed to help you know that the system is being honest with you, and helps keep you honest with yourself since you know exactly what range of price action was analyzed to identify the levels on the heatmap.
Heatmaps will not automatically refresh. To reflect the most current data, the chart analysis must be refreshed with the refresh icon on the top toolbar or visit the Hotkeys and Shortcuts Guide for more information on the TrendSpider User Interface.
Heatmaps are generated on your charts by complex mathematical calculations which require a short period of time to load and refresh. Depending on your computer’s CPU and memory specifications, the time required to load the Heatmap may differ. Please note that Heatmaps do not work with log scale charts.
You can add Heatmaps in a couple of easy steps:
- Click on the Heatmaps button in the top menu bar to activate them.
- Click on the “…” (three dots) next to the Heatmaps button to configure the type.
- Click Close to view the chart.
Heatmaps are generated by placing an overlay grid (fixed size 40 x 60 cells) over the area between the Truth and Analysis Lines. The “heat” (trendline/price confluence) of each cell is calculated based on the number of points present in each cell.
Depth: Depth maps are calculated from an over-laid grid that calculates the number of trend lines that cross through the cells in the grid. The more lines that cross through each cell the brighter the color will be; revealing areas where support or resistance is present. The areas with fewer trend lines crossing through cells will be lighter in color, with the color gradient lessening as the cells move away from the cells with the most trend line confluence.
Trends: Trend Heatmaps use the same calculations as Depth Heatmaps; calculating the number of trend lines that cross through a cell in the overlaid grid. However, this type of heatmap does not color adjacent cells as they move away from the cells with the most trendline confluence. What is generated is the raw data as the computer sees it.