Smart Money Concept

Supply and demand trading involves placing orders in areas where prices tend to reverse due to various factors. This is similar to support and resistance levels but broader in scope and often supported by fundamental factors.

Prices typically react strongly to supply and demand zones, indicating significant buying or selling interest.

But how do you know when to enter? That’s what the accompanying chart aims to illustrate. Look for patterns based on a rally followed by a pullback or its variations. Prices often retest the base area before surging toward new highs.

These zones allow traders to adopt favorable risk-reward ratios in their trades. You can place a buy limit order before the price reaches the base, and the chart will execute the trade automatically for you. Note that stop-losses should usually be set near the demand zone and below the supply zone.