A demand zone is identified by:

Sharp rally from a price area. Demand zones show where strong buying pressure created a rapid price increase.

Supply & Demand Zones

Institutional order zones for precision entries

Supply and demand zones are areas where significant buying or selling occurred, creating sharp price movements.

Demand Zone: Area where aggressive buying created a sharp rally. When price returns, expect buyers to step in again.

Supply Zone: Area where aggressive selling created a sharp drop. When price returns, expect sellers to step in again.

Identification: 1. Find a strong, impulsive move (big candle or series of big candles) 2. The base before the move is your zone 3. Draw the zone from the candle body to the wick extreme

Key rules: - First retest has highest probability - Fresh zones are stronger than tested zones - The stronger the move away, the stronger the zone - Always trade with the trend direction

Pro tip: The best demand zones show a base (small candles) followed by a strong explosive move up. The base IS the zone..

Common mistake: Drawing zones everywhere on the chart. Better: Only mark zones that created strong, impulsive moves. Quality over quantity..

Key takeaways

Demand = buying zone, Supply = selling zone
First retest has highest probability
Draw zones from base candles before strong moves
Fresh zones are stronger

Quiz

A demand zone is identified by: Answer: Sharp rally from a price area. Demand zones show where strong buying pressure created a rapid price increase.

Educational content, not financial advice.