LOTL — Merging Overlapping Zones
What LOTL means
LOTL stands for Level on Top of Level. It occurs when two demand zones (or two supply zones) partially or fully overlap — one formed above (or within) the other. Instead of treating them as two separate zones that confuse entry placement, you merge them into one larger box.
How to merge
For two overlapping demand zones: set the PROXIMAL of the merged zone at the HIGHER proximal (the one closest to current price). Set the DISTAL at the LOWER distal (the furthest extreme of both zones combined). The merged zone is now wider but counts as one zone with two sets of unfilled orders stacked inside it.
Why LOTL zones are powerful
Two independent sets of buying orders (from two separate zone formations) are now stacked in one area. When price arrives, it faces double the resistance from pending demand. LOTL zones have a higher reaction probability than single zones, though the wider range costs some reward-to-risk.
When to merge vs keep separate
Merge zones if their rectangles overlap or if one zone's proximal sits within the other zone's range. Keep zones separate if they are clearly non-overlapping (a gap of significant price distance between them). Never merge a demand and a supply zone — only merge same-type zones.
Practical example
A daily demand zone at ₹490–₹500 (proximal ₹500, distal ₹490) and a 4-hour demand zone at ₹495–₹505 (proximal ₹505, distal ₹495) overlap. Merged: proximal = ₹505, distal = ₹490. The combined zone ₹490–₹505 now represents two sets of unfilled demand orders.
Practice checklist
- Check if any two same-direction zones overlap or are very close
- Merged proximal = higher proximal of the two zones
- Merged distal = lower distal of the two zones
- The merged zone counts as ONE zone for freshness scoring
- Never merge demand and supply zones
Mistakes to avoid
- Treating overlapping zones as two separate setups — double-counting the same price area
- Forgetting that the merged zone is wider and costs reward-to-risk
- Merging zones that are clearly separated by significant price distance