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Levels & Patterns

Demand zone

Intermediate

Also calledsupply zonesupply and demandbase

The base price left in a hurry before a strong rally (a supply zone is the base before a strong drop).

What it means

Fresh zones that haven't been revisited are considered strongest. Order blocks are a sharper version of the same idea.

In practice

The reasoning is that a sharp departure means more orders were waiting there than could be filled. When price comes back, the unfilled part may still be there, so traders plan entries in the zone with a stop just beyond it.

The strongest zones have a tight base, a forceful move away and a break of structure as a result. Zones in line with the higher-timeframe trend are preferred.

What to watch for

Every chart is full of bases, and most of them do nothing. A zone that has already been visited several times, or that needed a slow grind to leave, has little left in it.

Entrix Academy

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