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Demand zone

A price area from which a sharp advance previously began, watched for renewed buying when price returns to it.

The mirror of supply-zone. The band covers the consolidation or single candle immediately before an impulsive rally, and the trade is a long on the return with a stop below the zone.

Practitioners distinguish fresh zones, untested since they formed, from zones price has already revisited, and generally consider the first test the highest quality. Whether that distinction survives testing is unclear, but it at least makes the rules explicit.

Two honest caveats: in a downtrend, demand zones fail one after another, and the technique gives no guidance about which zones to skip. Pair it with market-structure so that you are only buying zones in the direction the larger chart supports.

Related: supply-zone, order-block, support, market-structure, trade-location

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