Patterns in Supply and Demand Trading:

It's important to know the patterns involved in supply and demand zones. Like traditional price pattern analysis, supply and demand zones also have reversal and continuation patterns.

If you’ve ever wondered why you can sometimes spot the same big moves from similar price areas, it’s probably because big institutions have their buy and sell points there. In most instances, only those big institutions can move the market, and we will show you how to spot these big moves at the same points, creating supply and demand zones. In this article, we will show you everything that you need to know to get started incorporating supply and demand zones into your strategy: 

The Two Types Of Supply and Demand Zones

Although supply and demand zones serve the same purpose—areas where price might reverse—they can be classified into two types depending on whether they originate from a reversal or a continuation.

Continuation Zones:

1. Rally – Base – Rally (RBR)
2. Drop – Base – Drop (DBD)

Reversal Zones:

1. Rally – Base – Drop (RBD)
2. Drop – Base – Rally (DBR)