Most retail traders rely on moving averages, MACD, or RSI crossovers that lag far behind price. Demand and supply zone trading focuses on the primary cause of price movement: imbalances between buyers and sellers.
What Creates a Demand Zone?
A demand zone is created when institutional buying orders exceed available selling orders, causing price to violently rally away from a consolidation base. When price later retraces to this origin, remaining unfilled institutional orders often spark another sharp upward bounce.
The 3 Key Steps to Identifying High-Probability Zones:
- Look for explosive, wide-range candles leaving a consolidation base.
- Check multi-timeframe alignment (e.g. Daily demand aligning with Weekly uptrend).
- Ensure a minimum 1:3 reward-to-risk ratio before initiating any position.
