Lopez Channel
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FREE LOPEZ CHANNEL INDICATOR FOR METATRADER

Spot range bound markets with precision price channels

Identify high-probability reversal zones and market compression with a clean, multi-timeframe price channel. This tool helps you pinpoint oversold and overbought price levels based on volatility-adjusted historical highs and lows—perfect for traders who thrive in sideways or mean-reverting markets.

  • Highlights overbought and oversold levels visually
  • Uses a volatility-adjusted price channel
  • Draws lines on bar close, with no repainting
  • Multi-timeframe compatible for broader context
  • Suitable for scalping, range trading, and early breakout filtering
  • Clean color logic: green = oversold, red = overbought
  FAQ

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Description

The PZ Lopez Channel Indicator is a non-repainting tool that identifies price boundaries where reversals are likely to occur. It is designed to detect whether the market is trading within a tight, stable range—and help you act accordingly.

The channel is constructed as follows:

  • The green line marks the oversold zone, calculated from a 3-period moving average of the last two true highs minus the ATR
  • The red line marks the overbought zone, calculated from a 3-period moving average of the last two true lows plus the ATR

This formula adapts to market volatility and naturally tracks the evolving price range. The result is a flexible, dynamic channel that remains reliable across instruments and timeframes.

You’ll know the market is potentially reversing when:

  • Price touches the green line — look for long setups
  • Price touches the red line — look for short setups

Use this tool on its own or in combination with oscillators or candlestick patterns for even higher-probability entries. Because the indicator supports custom timeframes, you can calculate bands from a higher timeframe and display them on a lower one to create a multi-timeframe confluence effect.

Input Parameters

  • Timeframe – The timeframe used to calculate the channel levels (e.g. H1, D1, etc.)
  • Indicator Period – Number of bars to look back when building the channel

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Frequently Asked Questions

It helps identify when the market is trading in a narrow range and approaching the extremes of that range. It is best used for range trading, reversal setups, and identifying market compression before potential breakouts.

The red line marks the overbought level—suggesting the market may reverse downward. The green line marks the oversold level—suggesting upward reversal potential. These zones are calculated using a volatility-based method that adapts to recent price action.

No. The indicator draws only when the bar closes and does not alter past values. It is 100% non-repainting and reliable for live trading.

Yes. The indicator supports all timeframes and instruments, including Forex, indices, stocks, and crypto. You can even load the indicator using a higher timeframe (e.g. H4) on a lower timeframe chart (e.g. M15) to get better context.

While Bollinger Bands are based on standard deviation from a moving average, the Lopez Channel uses true highs/lows and ATR, making it better at detecting range boundaries and more stable during low-volatility periods.