What Are Supply And Demand Levels.

[moonchild]

Supply and Demand levels are those levels in the chart that holds a lot, when price hits a low or a high, demarcate it in the chart by drawing a horizontal line on the chart, in Forex there are support and resistance, these can also be known as supply and demand.

Supply can also be known resistance and demand can be known as support, these lines holds all the time and you can bank on them, supply and demand are also a strategy that people use to trade, you can backtest it and compare the data over time, most currency pairs always respect these zones.

When drawing a supply or demand zones, it is very ideal to start drawing from where the longest wick is down to where the lowest wick is, doing this can give you a zone, which you can easily recognize when there is a new high or low.

When trading using a supply and demand zones it is very ideal to know where to place your stop level, for support it's actually below the lowest wick, and for resistance is basically above the highest wick, so whenever your stop is hit, you already know that a new high is made, so you can move your line to the new high or low, no matter what the case maybe.

 

[Jack Reacher]

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[Shaf]

Supply and demand zones is one thing that helps every trader who masters them. When yuh you understand them and the type of action that majority of traders take here, the possibility of fake breakouts that can occur and the use of proper stop loss, it can save you money.

I rarely trade supply zones, mostly demand zones since I trade uptrends, but it helps to know where people will start taking profits. I place my sell orders close to supply zones, because most times, price can wick close to that point before reversing, especially if there isn't adequate volume to push price further.

Some traders use this, price action and volume analysis only to trade. It's best for pairs that have a long and stable, well established zones and in a market that is trending. You may get chopped if Yiu try this in a ranging or choppy market that has no clear direction.