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C12

Supply and Demand Levels (visible within a price chart)

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Here'a a quick primer on identifying supply and demand when it comes to price movement. 

I'll be posting live analysis in the Interactive Trading thread (Gold, Silver, Cryptos, Euro, Pound and anything else people want to see). This thread is more about learning how to read a price chart.

Below is a Weekly chart of EURUSD going back to 2006. I've highlighted the key areas where price made major reversals at both Supply and Demand levels. It is extremely important as a trader to be able to identify these zones. (these levels are like magnets and can be used for entries and targets). 

Price will reverse at key supply and demand levels on all instruments across all time frames. Supply and demand is a visual indicator of order flow within all markets that I will expand further upon.

I've highlighted (red arrows) what happens when price arrives at these levels.

More to follow:

SD.PNG

Edited by C12

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An example of a recent trade on the EURUSD daily chart where price retested a demand zone (within a higher timeframe uptrend). 

I use an indicator that draws the zones automatically but it's best to learn to identify them manually to begin with.  

With S&D trading you can often find trades with much higher risk/reward ratios than using standard technical patterns. You're buying or selling right at the source of the move (rather than after a rally or decline). 

EUD1.PNG

eu2.PNG

Edited by C12

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A weekly chart of the AUDUSD (Australian dollar / US Dollar). 

Here you can Supply and Demand in action.

We've currently formed a fresh demand zone and price has now reached a historical area where supply previously exceeded demand. 

This is a bullish chart that I would like to buy on pullbacks if we take out this current zone. 

AU.PNG

Edited by C12

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