when you truly Master supply and demand you will be able to trade with the smart money and you will know exactly when to enter and when to exit the trade so you can maximize your profits and minimize your risk but in order to master supply and demand there are five pillars which you must fully understand number one what is supply and demand number two how to identify and draw supply and demand zones number three where to enter and exit number four high quality zones versus low quality zones and last but not least why some supply and demand zones work and why some don't and I'll be covering all these five things in this long ass lecture today so put your seat belt on focus and take down some notes guys do not skip around you must watch this video in order from part one to part five in order to fully understand how to trade Supply and demand now first and foremost what is supply and demand zones supply and demand zones are basically areas where big Banks or smart money are trading at which means that if you can identify these supply and demand zones that means you will be able to trade with these big Banks and take advantage of their liquidity and if you look at any Market be Forex stocks or crypto you will realize that the markets actually move between cycles of balance and imbalance so to identify the supply and demand zones you need to look out for areas of consolidation like all these gray boxes that we have right here these gray boxers areas are what we call balance right balance is basically where the price is choppy price is slow and it's consolidating and there's no clear Trend so these are areas of balance after price creates balance imbalance will eventually come just like how in life sometimes when you are experiencing a good thing eventually a bad thing will happen to you sooner or later so this imbalance is basically this strong move that will occur after the consolidation where price is inefficient right so doing this imbalance that's where price is inefficient and there's a lot of momentum now one thing you must understand about supply and demand zones is that they are caused by momentum so the stronger the momentum of the price like this inbalance move here the stronger the zones will be now to make simple for you I have basically split the different types of supply and demand zones into two category reversal zones and your continuation zones let's look at the supply part first so for Supply zon that is your reversal zones so this is what we call Supply reversal or rather what I call it all right to make things easier so basically how it works is that price will have a strong up move and then eventually price will lose steam right and then price starts consolidating and next thing you know price reversed and he has became a downtrend so this is what we call your supply and reversal Zone another name for it is called rally based drop where it's literally what the name implies ready base drops all right that's how this other name comes from next type of Supply zones is your continuation Supply zone so in this type you can see price will drop and it starts consolidating and then it will drop again so basically price is just continuing in this downtrend after a period of of consolidation so this is reversal Supply zones or Supply reversal or Supply conation why would I to call it all right just the names actually don't really matter next let's look at the demand zones demand zones for reversal is when price drops and then starts consolidating like I said this downtrend is losing steam right now that's like a balance between buyers and sellers right the amount same buyers same amount of buyers and sellers and price doesn't know where it's going where exactly it's going to go and then eventually it breaks out this consolidation and it actually reverse to become a uptrend so drop base rally drop base rally and then for your continuation is basically like I said it's a continuation so price is in uptrend it push up starts consolidating and then eventually you break out this consolidation and push up even further so rally base ready so this your ready base drop rally base drop drop base drop drop base rally R base R you don't really have to memorize all these names honestly it's just a good way to identify these zones so to identify supply and demand zones you want to look for any one of these four scenarios that you can see right here so example when you see this on the charts you will know that somewhere around here this is your supply zone or if you identify this you can see that somewhere right around here this is your demand zone so you can wait for price to come back down to this demand Zone area and look for your entry which brings me to the next Point once you identify a Zone what you must do is to wait for price to come come back to the area of the zone right come back to the area of this Zone example only then is when you can finally enter for the trade after price has come back down to this Zone that we have right here so let me show you a few examples so over here you can see price Ries starts consolidating and it starts dropping so over here we have can actually draw like a little Supply zone right here so somewhere right around here there's a supply zone so what we can do next is to wait for price to eventually come back up to this Supply Zone that we have drone touches it and that is when we can enter for a sell position and you can see price will continue to go back down because price has entered a supply Zone and it's going to go back down and continue with this overall downtrend another example right here price was in a downtrend starts consolidating so once again we can draw another Supply zone right here and then you can see price starts to eventually go back up to retest the supply Zone and eventually go back down same thing over here but in this case is the demand Zone instead of Supply zones so once again price drops starts consolidating and then starts going up so at this point of time you should wait for price to come back down to this zone right this little demand Zone that we have right here and then that's is when you can enter for a buy now you must understand that when price is like somewhere right around here right when price is making this up move most beginner Traders they'll be entering they'll be rushing to enter because they feel a sense of foro they feel a sense of fear of missing out they don't to miss out on this huge opportunity so the end for a buy somewhere right around here in this up move and next thing you know price comes back all the way down here to retest this area this is demand Zone and stop them out while you the smart ass supply and demand Trader enter for the trade right here and take the price to the Moon another example right here price goes up consolidate immediately draw your demand Zone we have a price to come back down here retest this demand Zone and then that is when you can enter for the trade okay so now that you briefly understand what is supply and demand the next thing you must know is how to identify and how to draw this supply and demand zones and by the way you can use this for any time frame be the 5 minutes or the 1 hour or even the weekly time frame so this supply and demand strategy works really really well even if you are a scalper an intraday Trader or a swing Trader it doesn't matter it will work for you okay so very simple you need three steps to identify and draw this supply and demand zones first things first you want to look out for those strong big momentum move in price and how you can identify that is by looking out for those gigantic long ass candles like example this one right here this a very strong bearish Candlestick that we have right here it was a long candle so at this point of time we have identified the strong move or another example right here you can see huge candle compared to the other previous candles very strong move very strong momentum there's a lot of buying pressure so that's the first step identify your strong move second step is to identify the candle before the strong move so this is the strong move you want to look out for the candle before the strong move which is this one that we have right here this is the candle before the strong move and for in this case is this one right here this is the candle before the strong move now the third step is actually to just draw a box so go on the trading View and just take this box this rectangle tool that we have right here and draw a box of this previous candle from the top to the bottom bear in mind this is where most people gets confused because don't know exactly whether they should draw the box at the weak or the Candlestick body I myself will recommend you to actually draw from the top of the week to the bottom of the Candlestick week like the highest point price went to to the lowest point price went to so what I mean by that is that you can see this is the highest point of the Candlestick week plot your first point right here and then plot your second point right here this is the the lowest point of the week and then there we have it this is your supply Zone another example right here drag it from the highest point to the lowest point right here and drag it out this is your demand Zone as simple as that so this is actually how you actually draw your supply Zone and your demand Zone once you draw your supply and demand Zone that is when like I said just now you want to wait for price to eventually go back up to this area this Zone that we have drawn and then that is when you can look for your sell opportunity and short price all the way down same thing over here demand Zone we for price to come back down touches this demand Zone and there when you enter for a buy position and buy it all the way up now I want you to bear in mind that this zones right they can be as small as just one candle it doesn't matter how big they actually are as long as you follow these three steps and draw them correctly what matters more is the strength of the explosive move after the consolidation now let's open a blank chart and start drawing up some supply and demand zones so over here we have GBP JPY which is a currency pad that I have not been trading for a very goddamn long time now so we're going to use this and drop some supply and demand zones so first things first like I said three steps you want to identify the strong and explosive move right so over here strong and explosive move that we have right here Second Step identify the candle before the strong move so this is the candle before the strong move and then third step draw a box of that candle from the top to the bottom like this so there we have it this is your supply zone so we want to wait for price to eventually go back up to this AAL then that is when we can short it all the way down so another example right here in this case let's look for uh some maybe like a demand zone now huge green candle explosive move this is the previous candle draw Bo around it and look at our price price eventually come back down to this uh demand zone right here and then bounce back up so this is how you can really like just just keep on doing this right this is how you actually practice on drawing your supply and demand zones because remember practice actually makes you more competent so you need to really keep on practicing and practicing so that eventually you will get good so another example maybe somewhere right around here you can see right here I saw a big ass green candle right here strong up move so immediately I know that you have to mark out the candle before this strong up move so draw right here this will be your demand Zone okay they'll drag it extend it to the right side and wait for price to eventually come back down to this demand Zone then that is when you can enter for a buy look at this price went back down to this demand Zone enter for buy here and you can see price eventually go all the way back up so just keep on repeating this like I said guys practice mies competency so keep on practicing so another one right here this is your supply Zone you can see price goes up and then come back down here can draw like a little Supply Zone somewhere around here price comes back retest it then just eventually went all the way back down so Supply Zone demand Zone demand Zone Supply Zone let me give you a test real quick so based on those four scenarios that I've explained to you just now which scenario is this go comment down below if you get it correct I'm going to give you a kiss right now I'm going to give 5 Seconds To Go comment 5 4 3 2 1 okay the answer is this is actually rally base rally because this is the up move followed by consolidation and then another up move so in this case what you can have done is that you can draw a demand zone right here because this is when price made this extreme up move and before that we had this little candle right here so mark it up over here you can see price come back down to this area here and then goes back up do you got it correct if you get it correct here's the kiss now I'm going to show you a simple but High win rate supply and demand trading strategy that works so first things first you want to identify the zone so over here this is a ready base drop so somewhere over here there's a huge selling momentum right so over here we know that there's a supply zone right here so we can identify this by drawing at a previous candle before this huge move down to a supply zone right here so this this is our supply Zone and we want to wait for price to come back up to retest this Supply Zone and then that is when we can enter our cell position which is exactly what price has already done price has already come back down up here touches our supply zone so somewhere right around here we can enter for a sell so you can enter for a shot somewhere right around here and then this is when it gets a little bit tricky you want to place your stop loss above the zone that you have drawn so if you are drawing or rather you are trading a supply Zone you want to place your stop loss a few Pips above the supply Zone and then for the take profit you want to take profit at the next opposite zone so if you are trading a supply Zone you want to take profit at a demand Zone the next demand Zone but then if you are trading on a demand Zone you want to take profit at the supply Zone the next Supply zone so over here we want to identify the next demand Zone and you can do that by just looking down somewhere right around here you can see that is a supply Zone somewhere right around here I mean not supply Zone demand Zone somewhere right around here so this is where we can take our profit right and as you can see price immediately rejected this Supply Zone that we have drawn earlier and eventually went down here to smash our take profit as simple as that guys so over here this example was on The Daily time frame which is more for like swing Traders so I want to show you that this strategy works on other time frames as well so let's look at other examples let's look at this example over here right now we are on gpusd and we are on the one 1 hour time frame so this is more for intraday traders to swing Traders so over here you can see there's a drop base rally right so over here we can see that there's a huge bullish engulfing Candlestick right here which indicate there's a demand Zone somewhere right around here so you can IND indicate the demand Zone by drawing a box at this previous candle right here so this would be our demand zone so right now our next job is to wait for price to come back down and touch us this demand Zone and that is when we can enter for our Buy position so right now we still wait be patient be patient and you can see eventually price comes back down Tes this demand Zone gave us a do Candlestick so at this point of time this tell us that this little selling pressure is going to be gone right the buyers are going to come back in at this demand Zone institutional the big banks are going to be buying at this demand Zone and they're going to be buying in bulk so that is when you can look to enter for a buy position somewhere right around here right so what you can even do is to wait for a confirmation right which means you wait for a green Candlestick to be formed at this demand Zone then they give you like an additional confirmation that tell you that okay buyers are here buyers are inside this game right now which is usually what I would wait for for some sort of green Candlestick to perform like like example like this like this I mean so this is where you can enter for a buy place your stop loss below this demand Zone take profit at the next Supply Zone and if you look towards the left right you can identify there's actually a supply Zone somewhere right around here somewhere right around here there's a little Supply zone so this is where we can look to place our take profit and by the way guys you can see in this case right this stop loss is over 60 Pips so if you want to minimize your loss what I would suggest you to do is that after price has rejected this demand Zone and it starts going back up right that is when you can move your stop loss to below this last high right here this last low right here a few Pips below this area here when price has just rejected and it's about to go up to the next Supply zone so so that's when you can place your stop loss right there because if price eventually do something like this right where it go a bit and then starts coming back down and goes deeper into this Zone most likely this demand zone is going to fail it's not going to work so guess what you will get up with like a small tiny loss so over here let's look at how this trade plays out you can see eventually price goes up and smash our take profit somewhere right around this area here right there as simple as that guys and as you can see this is the one is the three risk to reward ratio trade as well if you notice on all these supply and demand trades right you will actually get a very extremely good risk to reward because you are literally entering the trade at such a optimal position with Precision that once you enter the trade price almost immediately going to take profit that is the beauty of supply and demand let me show you another example you can see right here there's a huge sell off right this gigantic long ass rate Candlestick implies there a supply zone right here as clear as day so place your supply zone right here extend the right so right now like I said we want to wait for price to come back up to this Supply Zone touches it reverse then that is when we can enter for our sell position so over here price went back down and started to reverse and reverse and eventually came back up somewhere right around here and it actually touches the supply Zone and actually went above it so in this case right what I'll do is that I'll go down to the 15minute time frame to look at what happens right you can see that's actually a gigantic long week okay this longest week which is honestly Market manipulation man when this happens it's more slightly a news come out so honestly when I see this I would not count as a valid reversal at this zone so what I do is to wait for the next candle and if you look at the next candle right price actually touches this Supply Zone and he actually gave a long upper Weck what does this tell us a long upper Weck tell us that there's a lot of sellers at this area pushing the price down therefore the price is closing somewhere right around here which is at a very low price and then next Candlestick price gave us a huge rate Candlestick which tell us once again selling pressure selling momentum this sck down is about to happen price is about to collapse and hit back down so that is when you can look to enter for a sell somewhere right around here like I said I would have entered some when it's over here because look at this long upper week long lower week right clear as day this Market manipulation all right so there a stop loss Above This Supply Zone that we have right here take profit at the next demand Zone which could be somewhere right around here let me check where's the next demand Zone next demand Zone will be yeah probably somewhere right around here actually this the next demand zone so as you can see this probably wasn't like the best trade setup that we have possibly get so let's just skip this a little bit by going back to the 1 hour time frame and you can see price eventually go back down and smash our take profit right there you can see right here right the movement price actually created this new lower high right that is when I will have potentially moved my stop loss from over here right this 100 Pips widest stop loss move it all the way down to here this is so that I can minimize my loss eventually if price reverse and break Market structure guess what I get up with like a tiny loss once again all about minimizing RIS and maximizing your reward that's all trading is so as you can tell this strategy allows you to identify where to enter and where to exit easily this helps to increase the chances of you using this strategy consistently and bear in mind that there is a lot of flexibility in terms of where you place your profit Target I myself like to place my profit targets at the next key level or even at the Fibonacci extension levels so just ultimately just test this out experiment with the different takeprofit levels and find out what works for you and just stick to using that the key to this strategy is to trade the high quality zones and avoid the low quality zones you want to trade like a sniper not a machine gun most people think that profitable trading is staying at the charts all day but in reality is actually patiently waiting for the perfect A+ trade setups that means you need to trade the high quality zones because you will have a higher chance of winning momentum is how you differentiate these high qualtity zones from the low quality zones so the more momentum that is the higher the quality of the zone let me explain so when you are determining the quality of the zone you must look at the price action and the size of the candlesticks in this example right here we have pattern a and pattern B demand Zone a and demand Zone B which one do you think has more momentum which demand Zone do you think is stronger obviously it will be the demand Zone a because in the demand Zone a there is a lot of momentum like if you look at these two candlesticks right huge long candlesticks indicate a lot of buying pressure a lot of buying momentum and you can see it's moving very very fast so in this case more momentum right here this means that this demand Zone will be stronger so chances are eventually when price comes back down touches this Zone it's going to react to this Zone higher chance of reacting to this Zone and it's going to go up compared to this one right here when you can see the candlesticks are a little bit small small small small candlesticks there not much momentum right here so this demand Zone will be a lower quality compared to demand Zone a let's let's look at a few examples now so over here you can see there's a huge bearish engulfing Candlestick right here big red Candlestick there us that's a lot of momentum a lot of selling pressure so in this case we know that there will be a strong Supply Zone somewhere right around this area here right strong Supply Zone and if you look at this and let's just copy this circle and you put it to this previous zone right here you can see same thing there's a supply zone right here so there is one Supply zone right here another Supply zone right here you can see in this one down move right it took one red Candlestick to do it but if you look at the same scenario right here it took three rate candles to complete this same down move so obviously this has more momentum more selling pressure and therefore this Supply zone is stronger compared to this Supply Zone that we have right here or another example right here in a demand Zone huge move huge momentum so there's a demand Zone somewhere right around here here right compare this to right here that is a demand Zone as well right here as well but then which one do you think will be stronger this one if a lot of momentum a lot of buying pressure or this one where there's little momentum right obviously it's going to be this one this demand zone is going to be much more stronger than this one so basically the point here is the momentum in the move will indicate the quality of the zones so if you have fast movement lots of momentum like this where there is more full candles this indicates higher quality of your supply and demand Zone however on the other hand if you have slow movement like this or even more like a lot of choppy candles like this where price just consolidating and lots of like chop right this indicates low quality low quality zones here's a harsh truth no strategy works all the time not all supply and demand zones work 100% of the time except that losses and wins are part of the game there are three ways to tell whether a Zone will work or not firstly Market structure secondly death third time let's dive deep into each one of these three factors so actually to illustrate this I've created a new supply and demand watch list where I've added some currency PS some of which I've have never ever touched or seen in my life just to show you that this whole supply and demand tips right works on anything be crypto stocks or Forex whatever it is whatever they trade it will work so first things first you want to focus on Market structure because this is actually the key to finding out whether a Zone will work so if price is in the uptrend you want to buy at demand zones and if price is in a downtrend you want to sell at Supply zones why because you want to trade with the trend rather than against the trend however there's an exception to this so you want to buy demand zones that have taken out Supply and you can also sell Supply zones that have taken out demand I know it's it's quite confusing right now so let me just show you a few examples so over here we can see there's a downtrend right in this downtrend price is creating what your lower highs lower lows lower highs and lower lows so clear as day is a downtrend so in this case right what I can do is to mark up all your supply zones first so I can see there's a supply Zone somewhere right around here another Supply Zone somewhere right around here right so in this case if you want to buy right if you want to buy in this downtrend because we already know that in the downtrend you should only sell at Supply zones right so they can trip the trend that means you can sell Here Sell Here two points where you can sell but if let's say you are stubborn mother fer so if to buy at the downtrend you need to buy at those demand zones that have taken out Supply so what I mean by that is that let's say there's a demand Zone somewhere right around here the only time where you can buy over here is when price has actually broken past this Supply Zone all comes back down to Market structure guys if price broks out of this Supply Zone this tell us what price is no longer creating a lower highs and lower low it's actually starting to create a higher high and higher low and this tell us that price is reversing and it's going to become a uptrend right now so only then that is when you can enter for a buy at the demand Zone when it has already taken out Supply when he has already shown you sign that it's going to reverse this downtrend is going to end that's the only time when you can look to enter for a Buy in a downtrend of course now here's another example in this case I can see that price is actually consolidating I can draw a supply zone right here and then I can also draw a demand zone right here so somewhere right around here you can see price goes up break through this Supply Zone and then now it's coming back down to retest this demand Zone that we have right here when it comes down to this demand zone are you able to buy over here let me ask you that are you able to buy over here of course you can because price has already broken the supply zone right here you see price has broke past this Supply Zone that we have right here so ideally you have to buy the demand zones that have already taken out the supply zones so this is when you can enter for a buy somewhere right around here take profit somewhere right around here or even the next demand zone or you can even place it all the way up at the next key level somewhere right around here now at the end of the day just look at the market structure so over here you can see price is creating lower highs lower lows lower highs lower lows lower highs lower lows and it starts to break past the previous lower high and come back down to create a new higher low this low higher than this one right here this already tell us that price is reversing to becoming a uptrend so next thing you know price actually starts to break past this Supply Zone once again create another higher high and another higher low and higher high and higher low so in this example right when price is in the uptrend like I said you want to trade with with the trend so make sure you stick to buying at demand zones so example if there's a demand Zone here or another demand Zone here right that is when you want to end up for buy end up for buy at all these demand zones when eventually price come back down to touches these demand zones and then don't try to sell at Supply zones unless it has already taken out the demand zones so what I mean by that is that if price comes back down and takes out this demand zone right and I come back up to somewhere here there a supply Zone and starts reversing that is when you can look to enter for a sell because now price has reversed from a uptrend to a downtrend right now so we can enter for a sell here and you can see price it just goes down like this you can see this is a lower high compared to this high right here so basically you want to buy demand zones that have taken out Supply and sell Supply zones that have taken out demand if you want to go against the trend the second factor is actually death so the deeper the price goes in into a Zone the higher the chance The Zone will fail that is the key here that is this is the key here the deeper the price goes into a Zone the higher the chance The Zone will fail let me explain let's say over here there's a huge bullish momentum right so obviously there's going to be a demand zone right here and look at what price did price comes back down and he actually touches this demand Zone but it didn't react it didn't reverse and hit back up right so you know you watch what price continue to do price continue to go down and eventually goes de de de and actually break past this demand zone now you went so deep into the demand Zone you will know that it's going to fail it's not going to work already so the general rule is that if price goes into more than half or actually all the way into the Zone like this right most likely it will fail once again this is not a guarantee sometimes it can work right sometimes what price can even do is that price can actually go in all the way touch just the end of this demand Zone and starts heading back up that's why you always want to like play by year and if you look at this there another Supply Zone that we have right here and it can draw like a supply zone right here so in this case you can see price has literally already gone all the way up to this area right here like the top of this Supply zone so chances are this is not going to work right unless price give like a huge red Candlestick right here and starts rejecting this area so like I said always make sure play by year don't anticipate don't predict what the market is going to do don't impose your thoughts or your bias onto the market react to the market that is the key to trading success now the third factor is actually time the longer the price spends in a Zone the higher chance The Zone will faill so the longer the price spends in the zone the higher the chance The Zone will faill so how do you exactly tell like how long is the price spending in the zone you look at the candlesticks you look at the amount of Candis stics so the general rule is that price will usually react to the Zone the supply or demand Zone within one or two days like example in this case price come back down to this demand Zone and within around 2 days price has already made this reaction and starts going up right so in this case we will know that this is a high qualty Zone and this Zone will work however on the other hand if price like starts consolidating and just going sideways for days inside the Zone like in this case 1 2 3 4 5 6 six days inside this Zone you already know that most likely this is not going to work so you can see price eventually actually end up going back down so in this case what you could have done is that you see that price is consolidating in the zone you see that this you know that this demand zone is not going to work that is when you can get out of the trade with a small loss cut your losses early now supply and demand Zone alone is not powerful enough for you to actually become a successful Trader you need to combine it with Market structure and you can learn that by watching this tutorial right here this full cost for free just go watch it man you have nothing to lose and remember you're just one trade away mAh