Demo account. Look around everything, with sample data. Nothing here can be changed.Exit tourSign up free
Loading…
Settings
Account info
Name
…
Email
…
Password
••••••••••
AI Analyst
Connect your own ChatGPT to ask questions about your trades, journal and backtests. Only your data, and read-only unless you let it add and edit trades when you connect (e.g. from a screenshot of your platform).
The base a strong move left from: unfilled orders there often move price again on the return.
Illustration, not real market data.
What it is
A demand zone is the area price was sitting in (the 'base') just before a strong move up. A supply zone is the base just before a strong move down.
The idea is that big orders were not all filled in that base, so when price comes back, the remaining orders can push it away again.
How to spot it
Find a strong, fast move away from an area: several large candles in one direction.
The zone is the small, tight candles (the base) right before that move. Its near edge, the one price reaches first on the way back, is the proximal line; the far edge, where the stop goes, is the distal line.
Bases come in four shapes: rally-base-rally and drop-base-rally make demand; drop-base-drop and rally-base-drop make supply.
The stronger the move away and the fewer times price has returned, the better the zone.
How to use it
Wait for price to return to the zone; enter on a reaction inside it, with the stop beyond the far edge.
Favour demand zones in an uptrend and supply zones in a downtrend.
Target the opposite zone or the next obvious level.
Common mistakes
Drawing zones from weak, slow moves.
Making the zone huge, which makes the stop huge.
Trading a zone that price has already returned to several times.
