Persistent Supply or Demand Level In A Trend Rotation
Supply and Demand Forex – The driving force behind changes in price is supply and demand. When there are more buyers than sellers, the market price will move up. Conversely, when there are more sellers than buyers, the market price will move down. When buyers and sellers are more or less even, the market will range. These simple concepts are very powerful and allow us to analyze naked charts in order to determine where the price is likely to go.
Since the current price is determined by past prices, this is a very simple method of technical analysis and a highly successful trading style that makes it possible to identify a specific entry price, and a supply zone or demand zone. Stop-loss and take-profit levels are also easily identifiable. Supply and demand in Forex trading (SD for short) provides a simple no-brainier system that gives good profits. All this without all the complexity of technical indicators, but rather through the interpretation of the bare price action itself.
Supply and Demand Forex Analysis
The supply and demand concept is timeless. It will always be the simplest, most atomic way of explaining why price changes. This is because the market is the place where sellers and buyers meet to conduct the business of exchanging the product for cash.
By understanding the supply and demand concept, it will be very simple to spot SD zones on charts. Although this would be a hindsight observation, it will give us a good hint of where to look for our trades in the future. It is key to understand that the theory of supply and demand Forex trading is based on analyzing and defining zones in the past. These zones determine where should we expect the price to react in the future.
How to Identify Demand Zones on Price Charts: To identify a demand zone on a chart, we are looking for a large candle or series of candles in the same direction moving up and away from a ranging price zone. When this occurs, the area underneath the point where the candle breaks through the body of the past two candles is a demand zone. As you can see in the graph.
How to Identify Supply Zones on Price Charts: The method for identifying supply zones on charts is similar to identifying demand zones, only reversed. You will be looking for a large candle or series of candles that fall beyond the bodies of the previous two candles in a downward direction. The area above this is a supply zone. At this point, we are looking for a significant move in the direction of the large candle. The stronger the move, the stronger the demand or supply zone is. It also suggests that the price will move in the same direction again when the price returns to this level in the future. We want the price to stay away for a while. If it comes right back, it is not a significant move. In other words, we want the move to be significant in both price and time. We now know where to enter the market and where to set our stop-loss and take-profit
Since the current price is determined by past prices, this is a very simple method of technical analysis and a highly successful trading style that makes it possible to identify a specific entry price, and a supply zone or demand zone. Stop-loss and take-profit levels are also easily identifiable. Supply and demand in Forex trading (SD for short) provides a simple no-brainier system that gives good profits. All this without all the complexity of technical indicators, but rather through the interpretation of the bare price action itself.
Supply and Demand Forex Analysis
The supply and demand concept is timeless. It will always be the simplest, most atomic way of explaining why price changes. This is because the market is the place where sellers and buyers meet to conduct the business of exchanging the product for cash.
By understanding the supply and demand concept, it will be very simple to spot SD zones on charts. Although this would be a hindsight observation, it will give us a good hint of where to look for our trades in the future. It is key to understand that the theory of supply and demand Forex trading is based on analyzing and defining zones in the past. These zones determine where should we expect the price to react in the future.
How to Identify Demand Zones on Price Charts: To identify a demand zone on a chart, we are looking for a large candle or series of candles in the same direction moving up and away from a ranging price zone. When this occurs, the area underneath the point where the candle breaks through the body of the past two candles is a demand zone. As you can see in the graph.
How to Identify Supply Zones on Price Charts: The method for identifying supply zones on charts is similar to identifying demand zones, only reversed. You will be looking for a large candle or series of candles that fall beyond the bodies of the previous two candles in a downward direction. The area above this is a supply zone. At this point, we are looking for a significant move in the direction of the large candle. The stronger the move, the stronger the demand or supply zone is. It also suggests that the price will move in the same direction again when the price returns to this level in the future. We want the price to stay away for a while. If it comes right back, it is not a significant move. In other words, we want the move to be significant in both price and time. We now know where to enter the market and where to set our stop-loss and take-profit