WHEN I STARTED, I WAS ALWAYS CONFUSED AND FRUSTRATED BY HOW MOST SUPPLY AND DEMAND ZONES I CHOSE FAILED
NOW I KNOW BETTER, I MADE A SIMPLE SUPPLY AND DEMAND GUIDE FOR YOU
A THREAD๐งต๐งต
1.*Supply Zone (๐)*
A supply zone is a price area where selling pressure is stronger than buying pressure. It usually forms after a sharp move downward, showing where big sellers (institutions, smart money, or large traders) entered the market.
๐น When price revisits this zone, sellers often re-enter with fresh orders.
๐น The excess supply creates resistance, making it hard for price to break higher.
๐น As a result, price may slow down, consolidate, or reverse downward from this area.
*Key Characteristics of a Supply Zone* :
Found near previous swing highs or after strong bearish moves.
Formed by clusters of sell orders left behind by institutions.
Acts like a โresistance wallโ where price struggles to advance.
2. *Demand Zone* *(๐)*
A demand zone is an area on the chart where buyers are more aggressive than sellers. This imbalance creates upward pressure on price.
๐น When price drops into this zone, buyers step in with strong buy orders.
๐น As a result, price often struggles to move lower and may bounce or reverse upward.
๐น Demand zones are usually formed after a sharp rally, showing where big institutions or smart money entered the market.