Supply and Demand Trading Strategy

Jul 22, 2025

Summary

  • The meeting reviewed a comprehensive gold trading strategy based on supply and demand concepts, suitable for different market conditions including ranging, uptrending, downtrending, and reversal scenarios.
  • The presenter emphasized the importance of following institutional "smart money" through identifying aggressive buying and selling zones, and waiting for confirmation signals before entering trades.
  • Key tactical elements discussed include using price zones, moving average crossovers, candlestick patterns as trade confluences, and disciplined stop-loss/take-profit placement.
  • No organizational attendees, dates, or administrative actions were referenced in the transcript.

Action Items

(No action items were discussed or assigned in this session.)

Supply and Demand Trading Strategy Overview

  • The core strategy involves identifying aggressive buying (demand zones) and aggressive selling (supply zones) by observing price action and candlestick patterns.
  • Traders should enter trades when price returns to these key zones and confirmations align, thus aligning their trades with "smart money" movements.
  • The strategy applies in all market conditions: trending, sideways/ranging, and reversals.

Application in Different Market Conditions

Ranging Market Example

  • In ranging or sideways markets, supply and demand zones are identified by observing clusters of strong red (supply/aggressive selling) or green (demand/aggressive buying) candlesticks.
  • Wait for price to revisit these zones, then confirm with a moving average (8 or 9 EMA) crossover and a relevant candlestick pattern before entering.
  • Place stop-loss above/below the zone and take-profit at the next key support/resistance level.

Uptrend Example

  • Identify demand zones formed by consecutive green candlesticks and higher lows.
  • Wait for price to pull back to the demand zone, then look for a moving average crossover and bullish candlestick (e.g., bullish engulfing) as confirmation.
  • Set stop-loss below demand zone and take-profit at the next historical resistance.

Downtrend Example

  • Locate supply zones where consecutive red candlesticks and lower highs occur.
  • Wait for price to return to the identified supply zone; ensure confirmation via moving average crossover and bearish candlestick formation before entering a short trade.
  • Place stop-loss above the last lower high or supply zone and take-profit at the next significant support level.

Reversal Example

  • Identify demand (support) or supply (resistance) zones by recurring reactions at specific price levels.
  • Wait for price to retest the zone and confirm entry with moving average crossover and significant candlestick patterns.
  • Monitor for reversal cues near take-profit; exit manually if reversal signals appear before targets are hit.

Decisions

  • Adopt supply and demand strategy with confirmation signals — This approach is validated for use across varying market conditions as described.

Open Questions / Follow-Ups

  • None raised or discussed in this session.