What is Supply & Demand

What are Supply/Demand zones reveal potential areas of institutional price action. These areas
where institutions (big/bank money) are likely trading. Identifying these zones creates
opportunities to follow big/bank money trades.

To identify these zones you need to look for areas of consolidation (grayed for the purposes of
this video) which is a tight range with minimal movement. These areas are also called balance
which is separated by imbalance. Imbalance is indicated by strong moves in either direction.

Demand Zones Supply Zones

Drop Base Rally Rally Base Rally Rally Base Drop Drop Base Drop
(DBR) (RBR) (RBD) (DBD)

Strong Drop in price Strong Rally up in Strong Rally up in Strong Drop down in
into a consolidation price into price into a price into
period which is then consolidation which is consolidation period consolidation which is
followed by a strong then followed by which is then followed then followed by
Rally up in price. another strong Rally by a strong Drop another strong Drop
up in price. down in price. down in price.

To identify supply and demand zones look for the areas of consolidation described in the four
scenarios above.

Once you’ve identified a particular zone you can then make an entry if/when it returns to your
identified zone (area of consolidation).

Drop Base Rally

Possibl
e entry
point

Demand

Key Reminder: The speed in the moves between the consolidation is crucial in identifying
supply and demand zones.