Smart Money Concept

Supply and demand trading involves placing orders in areas where price tends to reverse due to multiple factors. This is somewhat like support and resistance levels, but with a broader range and usually backed by fundamental factors.

Typically, price reacts dramatically to supply and demand zones, indicating significant buying or selling interest.

But how do you know when to enter? That's what the chart illustrates. Look for price action based on rallies and pullbacks or their variations. Price often retests the base area before pushing toward the rally high.

These zones enable traders to employ favorable risk-reward ratios in their trades. You can set a buy limit order before price touches the base, and the chart will execute automatically for you. Note that stop losses should typically be placed near the demand zone and below the supply zone.