Your Complete Guide to Supply & Demand Zones
Learn how to identify and trade high-probability supply and demand zones by understanding the logic behind price movements using clean, proven trading methods.
Lesson 1: Ultimate Guide to Supply & Demand
Comprehensive guide to understanding and trading supply and demand zones effectively.
Lesson 2: Supply/Demand vs Support/Resistance
Learn the key differences between supply/demand zones and traditional support/resistance.
Lesson 3: Drawing Supply & Demand Zones
Step-by-step guide to accurately drawing supply and demand zones on your charts.
Lesson 4: 3 Key Sam Seiden Facts
Discover three critical insights from Sam Seiden to enhance your supply/demand trading.
Lesson 5: Proximal & Distal Lines
Master drawing supply/demand zones using proximal and distal lines for precision.
Lesson 6: Simple Trading Trick
Quickly improve your supply and demand trading with this easy technique.
Lesson 7: Common Drawing Mistake
Avoid the #1 mistake everyone makes when drawing supply and demand zones.
Lesson 8: Daily Supply & Demand Trading
Full guide to trading supply and demand zones on the daily timeframe.
Lesson 9: Avoid RBR/DBD Zones
Why you should steer clear of rally-base-rally and drop-base-drop zones.
Lesson 10: Profit vs Trade Zones
Differentiate profit-taking zones from trade-placing zones in supply/demand trading.
Frequently Asked Questions
Common questions about supply and demand trading answered by our expert traders
Why Do My SD Zones Keep Getting Hit By Fakeouts?
Fakeouts in SD zones often occur because the zone isn't valid or strong enough. Check for multiple retests, look at higher timeframes, and ensure you're drawing zones from fresh price activity. Proper zone identification with clean moves away is crucial for minimizing fakeouts.
Learn more →Can You Check If I've Drawn These Zones Correctly?
For zone verification, focus on the base candles showing imbalance, clear proximal/distal lines, and proper zone width. Valid zones come from areas with strong momentum change. Send your charts to our community forum for expert review and personalized feedback.
Learn more →How Do You Determine Fresh Supply And Demand Zones?
Fresh zones haven't been tested multiple times. Look for strong momentum away from the zone, minimal previous price interaction, and clean candlestick patterns. The strongest zones show a clear imbalance between buyers and sellers with a rapid price movement away.
Learn more →Queries About SD, Banks, Orderbooks, and Liquidity?
Supply and demand zones represent institutional activity where large players (banks, funds) place orders. These zones typically contain significant liquidity and unfilled orders. While retail traders can't see orderbooks directly, we can identify these zones through price action and smart money concepts.
Learn more →What Price Action Invalidates A Supply/Demand Zone?
A zone becomes invalid when price breaks through and closes beyond it, when multiple wicks penetrate deeply into the zone, or when price consolidates within the zone. Once price spends significant time inside a zone, the imbalance that created it is likely resolved.
Learn more →Supply & Demand Entry + Retracement Question?
For optimal entries, wait for price to retrace into your zone, then look for confirmation signals like rejection candlesticks, divergence, or order blocks. Limit entries to the first or second test of a zone for best results. Consider using smaller timeframes for precise entries within your identified zone.
Learn more →What's Your R/R For Trading 1H Zones With 5M Entry?
When using 1H zones with 5M entries, aim for at least 1:2 R/R, but preferably 1:3 or greater. Place stops beyond the distal line of your zone. Using lower timeframes for entry provides tighter stops while maintaining the edge of higher timeframe analysis, often improving your overall risk-to-reward ratio.
Learn more →Why Did This USD/CAD 1H Supply Zone Fail?
Zone failures happen for several reasons: higher timeframe trends overriding lower timeframe zones, zones that were already tested multiple times, fundamental news disrupting technical patterns, or improper zone drawing. Always check higher timeframe context and historical validity of your zones.
Learn more →Queries About Stop Loss Position For SD Trades
Place stop losses beyond the distal line of your zone (the furthest boundary from price approach). For demand zones, stops go below the zone; for supply zones, stops go above. Consider adding a small buffer (5-15 pips) beyond the distal line to avoid getting stopped out by minor wicks.
Learn more →Does Price Always Flip From Higher Timeframe Zones?
No, price doesn't always flip from higher timeframe zones, but they're more reliable than lower timeframe zones. The strongest zones are on daily and 4H charts with clean bases and strong departures. Market context, zone freshness, and overall trend all influence whether a zone will cause price to flip.
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