Supply & Demand

Each course follows the same structure. A brief explanation of the concept followed by several tutorials from the live market. The idea is to make traders aware of the various tactics and create a better understanding for the daily/weekly analysis section.

Supply & Demand  course

Everytime supply swamps demand we see a swift and robust breakout the same is true whenever demand overcomes supply. Effectively creating an imbalance when there are more sellers than buyers and the other way around.

In the wake of the breakaway there are always unfilled orders left and it is imperative that once price retraces back into the origin of the S&D imbalance that price will exhibit a sharp reversal.

A note before we analyse the structure of S/D zones. It is key that the breakout occurs on the back of fast and big candles same thing is true for the retest. Furthermore for a confirmed S/D zone price needs to trade away dramatically, post breakaway.

Tutorial 1

Steps of a supply imbalance.

s_d01

Price was traversing gradually higher where it suddenly dipped and created a sharp pin to the downside.

s_d02

The gradual move picked up again until it hit consolidation

s_d03

Followed by a massive and unstoppable move lower, making a clean break past the sharp pin from earlier.

s_d04

If we were to label this structure. A would be the base of the supply zone. B is the top of the range and C marks the entire range.

s_d05

Several month later price revisits the zone and bounces as prior unfilled orders dominate direction.

Tutorial 2

Steps of a demand zone

s_d06

In this example price was rising and created a sharp pin to the upside.

s_d07

Price consolidated and made a clean break past the pin

s_d08

A few sessions later price fell back to the demand zone and got supported by more buy orders.

Tutorial 3

Variation to the S/D imbalance structure.

s_d09

Price spiked lower two times creating two pins in the process which act as the imbalance base

s_d10

Following a clean breakaway from the spike base we see price moving back into the supply zone and loading up further on sell orders and eventually collapsing.

Miad

If you’d like to understand market better and trade with the flow while you are full time employed contact me on twitter @ZFXtrading I offer support, or visit my YouTube channel Speculators Trading for Tutorials 

Miad

View posts by Miad
Currency&Commodity Trader

2 Comments

  1. Ugo Martins
    December 01, 2017

    so should i say demand and supply zone are strong resistance and support zone for reversal

    Reply
  2. Ugo Martins
    December 02, 2017

    is there an indicator to identify this supply and demand zone or one have to manually identify each day.

    Reply

Leave a Reply to Ugo Martins Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Scroll to top