Esco Theory V3.1Esco Theory Geometry Model V3 is a structural analysis overlay that maps market geometry, supply and demand, liquidity, fair value gaps, and volatility compression in one framework.
The tool combines market structure, liquidity mapping, supply and demand zones, fair value gaps, and volatility squeeze detection into a single structural system.
It does not generate buy or sell signals. It shows the structural conditions that often precede large moves so traders can plan trades around them.
Built for discretionary traders who read price action and structure.
Originally developed for crypto futures but it works on any liquid market.
Every feature can be toggled on or off. Every color, lookback period, tolerance, and threshold is adjustable. You can run only rails and support resistance or the full system. It adapts to your trading style and timeframe.
WHAT IT SHOWS
V3 draws the structural architecture of price directly on the chart.
Geometric rails and trend channels from swing pivots
Horizontal support and resistance from clustered pivot levels
Supply and demand zones validated by displacement
Fair value gaps from three candle imbalances
Inverse fair value gaps from filled imbalances
Equal highs and equal lows that often act as liquidity targets
Confluence zones where multiple levels overlap
Volatility compression detection with squeeze and expansion signals
Each component is independent. Turn on what you use. Turn off what you do not.
GEOMETRIC RAILS
The indicator connects significant swing highs and lows with diagonal trendlines and projects them forward.
Minor rails track recent structure.
Major rails map the larger cycle.
Cross rails connect highs to lows for diagonal support and resistance.
Cycle fans project from cycle extremes through opposing pivots.
These rails form structural corridors that price often travels inside.
When a rail aligns with a horizontal level or a supply demand zone the reaction tends to be stronger.
Rail color, width, extension distance, and cross rail count are adjustable.
SUPPORT AND RESISTANCE
Nearby pivot points are clustered into horizontal levels.
Each level includes a touch count so you can see how many times price has reacted there.
More touches usually means a stronger level.
Levels automatically flip between support and resistance depending on where price trades relative to the level.
You control minimum touch count and clustering tolerance so detection can be tuned for your timeframe or market.
SUPPLY AND DEMAND ZONES
Zones are detected at pivots where price displaced strongly away from the origin candle.
A valid zone requires clear displacement.
Supply zones represent potential distribution areas.
Demand zones represent potential accumulation areas.
Zones are removed when price closes through them.
New in V3 zones track retests.
Each time price revisits a zone the color fades slightly and the label updates with the retest count.
A fresh zone with zero retests is strongest.
A zone labeled S x3 has been tested three times and is weaker.
Zone count, pivot lookback, mitigation behavior, fade behavior, and colors are configurable.
FAIR VALUE GAPS
V3 detects fair value gaps using three consecutive candles where a price gap forms around the middle candle.
Bullish FVG occurs when candle one high does not overlap with candle three low.
Bearish FVG is the inverse.
Fair value gaps represent price inefficiency where the market moved too quickly.
These areas often get revisited as price rebalances.
Minimum gap size, lifespan, and automatic removal after midpoint fill can be configured.
INVERSE FAIR VALUE GAPS
When a fair value gap is fully mitigated it becomes an inverse fair value gap.
A filled bullish FVG becomes resistance.
A filled bearish FVG becomes support.
The zone remains on the chart with a different color until price closes through it again.
This captures the common behavior where filled imbalance zones flip direction.
CONFLUENCE
The indicator scans all detected levels and highlights areas where several structures cluster together.
When rails, horizontals, and supply demand overlap the probability of a reaction increases.
Confluence zones show how many levels overlap in the same area.
Cluster width and minimum level count can be adjusted.
COMPRESSION AND SQUEEZE
Volatility compression is detected using ATR ratio, Bollinger Band width, and Keltner Channel containment.
When volatility contracts the chart highlights compression.
This means price is coiling and energy is building.
Optional wedge detection shows converging pivot structure during compression.
Compression thresholds and pivot lengths can be tuned.
SQUEEZE AND FIRE
The squeeze system identifies when Bollinger Bands sit inside Keltner Channels.
Red diamonds mark squeeze bars.
Volatility is compressed and a move is building.
This does not predict direction.
Green triangles mark the fire bar where compression releases and volatility expands.
Expansion often appears as breakouts or displacement candles.
LIQUIDITY
The indicator detects equal highs and equal lows.
These areas often act as liquidity pools where stops accumulate.
Price frequently moves toward these levels before reversing or continuing.
Tolerance for equal highs and lows can be adjusted.
HOW TO USE IT
Strong setups occur when several tools agree.
Typical workflow.
Read the rails and understand the direction of structure.
Identify key levels from support resistance, supply demand, and fair value gaps.
Look for confluence where several levels overlap.
Watch compression. Squeeze near a key level means energy is building.
Wait for fire. Expansion from a confluence area often produces the move.
Confluence matters more than any single signal.
The indicator is meant to be tuned to your style and timeframe. The default settings are a starting point.
MARKETS
Originally built for Bitcoin and crypto perpetual futures.
It works well on other liquid markets including Ethereum, forex majors, index futures, and high volume equities.
Default settings are tuned for crypto on 5 minute to 4 hour charts.
Adjust swing lookback and pivot length when switching markets or timeframes.
ESCO THEORY
Markets move through repeating cycles.
Compression
Liquidity grab
Expansion
Most traders only see the breakout.
Structural traders map the conditions that lead to it.
Esco Theory focuses on identifying those structural conditions.
Geometry Model V3 visualizes them on the chart.
DISCLAIMER
This indicator is for market structure analysis only.
It does not provide financial advice or automated trade signals.
Always use proper risk management.
Trade safe.
Esco
Penunjuk Pine Script®
